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The market has flipped its expectations for the Fed

Wed, 03/20/2019 - 2:24pm

  • Wall Street now sees an interest-rate cut as more likely than an increase for the Federal Reserve this year.
  • Market watchers had been anticipating two interest-rate increases in 2019.
  • Forecasts for growth, however, have dimmed in major economies including the US.

Market watchers have long been anticipating a steady increase in borrowing costs. But as outlooks for the economy dim, they see an increasing possibility that the Federal Reserve could actually lower interest rates in its next policy move.

Expectations for an interest-rate hike this year have fallen below those for a cut. Bloomberg data shows a zero percent chance the Fed raises rates this year and a 27.7% probability of a 25-basis-point cut. In January, the central bank signaled it could be nearing the end of its most recent tightening cycle.

That could become more apparent Wednesday afternoon, when the Federal Reserve is widely expected to hold interest rates steady. Focus will be on how much growth is expected to slow this year and signals on future moves.

"We can't rule out a dot plot showing zero hikes, but the danger for the FOMC in taking such a drastic step is that markets would then take any soft data over the next few weeks as an open door to start pushing hard for easing," said Ian Shepherdson, the chief economist at Pantheon Macroeconomics.

The 12-member Federal Open Market Committee most recently voted to increase its benchmark interest rate by a quarter percentage point, bringing it to a target range of between 2.25% and 2.5% in December.

Officials have since then signaled they would take a more cautious stance toward monetary policy, citing recent stock-market turbulence, ongoing trade tensions, and dimmer expectations for global growth. At the most recent meeting, in January, they dropped a reference to "further gradual increases."

Still, some see a possibility for at least one of the two rate increases that had been expected for the year. There have been signs of upward pressure on US wages, with average hourly earnings jumping in February by the most in a decade.

"When it comes to making policy decisions, we interpret the Fed's preference for patience as one of timing, indicating the current hiking cycle hasn't ended quite yet," said Charlie Ripley, a senior market strategist for Allianz Investment Management.

The Fed is also expected to reveal details on plans to hold a larger balance sheet than previously expected. In 2017, the central bank began reducing the $4 trillion portfolio of US Treasury debt and other assets it acquired following the financial crisis.

SEE ALSO: A leaked memo shows a shakeup is underway in Bank of America's sales and trading division, as a star sales exec is switching roles and another is leaving the firm

Join the conversation about this story »

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Lyft will be the first ride-hailing company to go public. Here's how its numbers compare to Uber. (LYFT)

Wed, 03/20/2019 - 2:21pm

  • Lyft is Wall Street's first shot at ride hailing.
  • While the company is much smaller than Uber, it has been slowly gaining ground on its global competitor.
  • Business Insider compiled numbers from Lyft's IPO filing to compare them to Uber's self-reported numbers from the past two years.

All eyes are on Lyft this week as its executives head out on a roadshow to court investors across the country ahead of its hotly anticipated IPO.

With the ride-hailing firm's prospectus finally public, it's the first time many of Lyft's financials have been opened up beyond the internet team.

For analysts and investors, it's also the first time the comparison to Uber, Lyft's much larger competitor, is finally possible.

Read more: Why insiders say the first-time CFO running Lyft's $20 billion IPO is the perfect fit

Unlike Uber, which commands a slightly bigger market share in the US, Lyft has not reported its quarterly financials.

Business Insider dug through the IPO filing to compare Lyft's performance in recent years to those of Uber.

Compiled with other insights, like app installs and market data, they paint of a picture of a close race to dominate ride hailing in the US.

SEE ALSO: A 'warrior's warrior': Why insiders say the first-time CFO running Lyft's $20 billion IPO is the perfect fit

Uber is still bigger — by a huge magnitude

In the most recent reported quarter, the end of 2018, Uber generated $3 billion in revenue, it said in a release. Lyft, meanwhile, said in its S-1 filing that it brought in $670 million for the same period. But while Lyft's revenue growth appears to be picking up steam, Uber's rapid growth from 2016 and into 2017 shows some slowing.

There's still plenty of room for growth, though. Americans spend $1.2 trillion annually on personal transportation, according to Tom White, an analyst at D.A. Davidson, who was the first Wall Street analyst to launch coverage of the stock this week. White gave Lyft a buy rating with a $75 price target, about 15% above the company's planned range of $62 to $68 for initial share prices.

"We are currently modeling Lyft revenue growth this year of 56%, to $3.4 billion," White said in a note to clients Tuesday.

Both companies are losing lots of money

With the exception of one quarter for Uber — when its acquisitions of Yandex in Russia and Grab in Southeast Asia closed — both companies' balance sheets are deeply in the red. Both companies are racing to slow those losses, while still investing enough to continue growing, to appease investors.

Uber, as one might assume, has more losses per quarter in step with its higher revenue. Both companies, as well as analysts, have pointed to gross bookings as a better way to understand ride hailing's growth.

It all comes down to bookings

Uber and Lyft calculate bookings slightly differently, but the measure is essentially the same for both companies. In short, gross bookings is all the money that customers spend on rides (and, in Uber's case, Uber Eats deliveries, too).

Tom White, of Davidson, expects that Lyft could get its share of total bookings in the US up to about one-third.

"Our long-term valuation framework for Lyft assumes that the company achieves a 31.4% bookings share by 2029 (vs. an estimated 14.9% share today)," White said in his initiation report.

And to continue increasing its share of booking's Lyft will need to get more people on the app

See the rest of the story at Business Insider

The Federal Reserve just dimmed its outlook for the economy

Wed, 03/20/2019 - 2:14pm

  • The Federal Reserve left interest rates unchanged Wednesday as was widely expected.
  • While forecasting slower growth, officials said they expected not to hike rates this year.
  • The central bank also said it expected to end its runoff process in late September.

The Federal Reserve left interest rates unchanged Wednesday as was widely expected and signaled that it would most likely be a while before another increase.

At the end of a two-day policy meeting, the central bank dimmed its economic outlook and said it did not expect to raise interest rates this year. Officials now predict that the US economy will expand by 2.1% in 2019, compared with previous expectations for 2.3% growth.

That's far below estimates from the White House but in line with the consensus. A string of softer-than-expected data releases in recent months has added to expectations for a slowdown domestically and abroad.

"In light of global economic and financial developments and muted inflation pressures, the Committee will be patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate to support these outcomes," the central bank said in a statement.

The 12-member Federal Open Market Committee most recently voted to increase its benchmark interest rate by a quarter percentage point, raising it to a target range between 2.25% and 2.5% at the end of 2018.

Officials had since signaled they would take a more cautious stance toward monetary policy, citing recent stock-market turbulence, ongoing trade tensions, and dimmer expectations for global growth. At the FOMC meeting in January, they dropped a reference to "further gradual increases."

Still, the Fed said it expected "sustained expansion" and penciled in one rate increase in 2020. There have been signs of upward pressure on US wages, with average hourly earnings jumping in February by the most in a decade.

The Fed on Wednesday also offered details on plans to hold a larger balance sheet than previously expected, saying it expected to end its runoff process in late September. In 2017, the central bank began reducing the $4 trillion portfolio of US Treasury debt and other assets it acquired following the financial crisis.

"It's even more telling that they're beginning to pull this additional lever as well, which establishes a decidedly accommodative stance for the Fed," Mike Loewengart, the chief investment strategist at E-Trade, said.

SEE ALSO: The market has completely flipped its expectations for the Fed

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AI IN BANKING AND PAYMENTS: How artificial intelligence can cut costs, build loyalty, and enhance security across financial services

Wed, 03/20/2019 - 2:07pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here

Artificial intelligence (AI) is one of the most commonly referenced terms by financial institutions (FIs) and payments firms when describing their vision for the future of financial services. 

AI can be applied in almost every area of financial services, but the combination of its potential and complexity has made AI a buzzword, and led to its inclusion in many descriptions of new software, solutions, and systems.

This report from Business Insider Intelligence, Business Insider's premium research service, cuts through the hype to offer an overview of different types of AI, and where they have potential applications within banking and payments. It also emphasizes which applications are most mature, provides recommendations of how FIs should approach using the technology, and offers examples of where FIs and payments firms are already leveraging AI. The report draws on executive interviews Business Insider Intelligence conducted with leading financial services providers, such as Bank of America, Capital One, and Mastercard, as well as top AI vendors like Feedzai, Expert System, and Kasisto.

Here are some of the key takeaways:

  • AI, or technologies that simulate human intelligence, is a trending topic in banking and payments circles. It comes in many different forms, and is lauded by many CEOs, CTOs, and strategy teams as their saving grace in a rapidly changing financial ecosystem.
  • Banks are using AI on the front end to secure customer identities, mimic bank employees, deepen digital interactions, and engage customers across channels.
  • Banks are also using AI on the back end to aid employees, automate processes, and preempt problems.
  • In payments, AI is being used in fraud prevention and detection, anti-money laundering (AML), and to grow conversational payments volume.

 In full, the report:

  • Offers an overview of different types of AI and their applications in payments and banking. 
  • Highlights which of these applications are most mature.
  • Offers examples where FIs and payments firms are already using the technology. 
  • Provides descriptions of vendors of different AI-based solutions that FIs may want to consider using.
  • Gives recommendations of how FIs and payments firms should approach using the technology.
Subscribe to an All-Access membership to Business Insider Intelligence and gain immediate access to: This report and more than 250 other expertly researched reports Access to all future reports and daily newsletters Forecasts of new and emerging technologies in your industry And more! Learn More

Purchase & download the full report from our research store

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Theranos is the biggest healthcare startup to fail in recent years, but it's not alone. Here are 9 others that have flamed out.

Wed, 03/20/2019 - 1:52pm

  • Not every healthcare startup that manages to raise tens or hundreds of millions ends up working out, for one reason or another. 
  • Theranos,, and sleep-tracker Hello are among the healthcare startups that have closed down in the past five years. 
  • Here are 10 of the biggest healthcare startups that haven't panned out in the past few years, as highlighted by CB Insights.

When Theranos, the beleaguered blood-testing company that's now the subject of a book, documentaries, and a podcast, closed its doors in 2018, it joined a crop of healthcare startups that ultimately didn't live up to investors' lofty expectations. 

While none had the spectacular fall from grace that Theranos had, healthcare startups that raised tens of millions or even hundreds of millions from investors in the past five years have ultimately decided to close their doors for one reason or another. 

Here are 10 of the biggest healthcare startups that haven't panned out in the past few years, as highlighted by CB Insights.


For home-care company HomeHero, a change in how it could employ its caregivers dealt a deadly blow. In February 2017 HomeHero shut down its home care business and pivoted to a new healthcare venture

Funds raised: $20 million

Year closed: 2017


Lantern, a mental health startup that built tools to help people deal with stress and anxiety, ceased commercial operations in 2018 after six years, after having trouble selling to consumers. The company's software however, lives on in digital health startup Omada Health, which is offering cognitive behavioral therapy to those with depression or anxiety.  

Funds raised: $21.5 million

Year closed: 2018


Raze Therapeutics

Raze Therapeutics, founded in 2014, set out to develop a new class of cancer medications. But in 2017, the company decided to call it quits, sending its potential treatments back to academia

Funds raised: $24 million

Year closed: 2017

See the rest of the story at Business Insider

Bill Gates is $9.5 billion richer than he was a year ago, worth over $100 billion, but not just from Microsoft (MSFT)

Wed, 03/20/2019 - 1:18pm

  • Bill Gates is one of the world's biggest philanthropists and has given away billions of dollars of his money.
  • That's why so many people think that Gates' personal wealth is shrinking as he gives his money away.
  • But it isn't. Gates is astoundingly rich and getting richer all the time.
  • And he just joined a two-man club of people worth more than $100 billion.

Bill Gates is one of the world's biggest philanthropists. He and his wife, Melinda Gates, have given away a whopping $45.5 billion in their lifetimes through their foundation and other charities, according to The Chronicle of Philanthropy. Plus, he has vowed to give away the majority of his wealth to charity and founded the Giving Pledge, an organization that asks other wealthy people to do the same, with his close friend Warren Buffett.

That's why so many people think that Gates' personal wealth is shrinking as he gives his money away.

But it isn't. Gates is astoundingly rich and getting richer all the time.

Read more: I spent an uplifting day at the Bill & Melinda Gates Foundation and discovered what it's really like to work there

He's $9.5 billion richer now than he was one year ago, and his personal wealth is just cresting at the $100 billion mark, according to the Bloomberg Billionaire Index. It's amazing to contemplate that the rounding number — that half-billion dollars of the $9.5 billion — is itself half a billion dollars and represents a larger net worth than even the most well-off families will ever be worth. And in 2014, Gates was worth $76 billion. So he's up $24 billion in five years.

That $100 billion net worth puts him in rarified air even for a billionaire. It's an exclusive two-man club with that other superrich Seattle-area guy Jeff Bezos. Bezos is known as the richest man, worth about $146 billion.

Gates has, many times, been considered the No. 2 richest person before, some seven or so times out of the last 24 years.

But the truth is, we don't really know how rich Gates is.

Many of his investments are done through Cascade Investment, his firm run by a notoriously secretive money manager, Michael Larson. Those investments run the gamut from large stakes in public companies, such as Waste Management and AutoNation, to real estate and other business interests.

On top of that, the Bill and Melinda Gates Foundation also invests in some for-profit businesses, with those stakes controlled by either Bill, Melinda, or both of them. For instance, their foundation bought nearly 800,000 shares of  Liquidia Technologies, a biotech company developing personalized, engineered drugs, according to Securities Exchange Commission filings. Liquidia is in the process of an initial public offering. Although, to be fair, such stakes are for the foundation and don't count toward Gates' personal wealth.

On the other hand, most of his fortune no longer comes from Microsoft, even though his Microsoft stock is doing well under CEO Satya Nadella.

Over the past 15 years, Gates sold off most of his Microsoft stake. In 2004, he had 1.1 billion shares of Microsoft. Today, he keeps about 103 million shares, which are worth about $12 billion. He hasn't been selling or acquiring more shares over the past couple of years, waiving both his cash salary and his share grants for his role as chairman.

But there are times when he winds up with a little more from Microsoft through his many business interests.

For instance, in April 2017, Microsoft acquired a company called Intentional Software, founded by a former longtime Microsoft engineer, Charles Simonyi, who worked on Excel and Word. Gates was an investor in Intentional through one of his investment companies, and Microsoft paid him $60 million when it bought the company, it said.

So while Gates spends his energy on charitable giving, his fortune is growing far faster than he can give it away.

SEE ALSO: Car-bomb fears and stolen prototypes: Inside Facebook's efforts to protect its 80,000 workers around the globe

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Glossier is the newest tech startup to reach a $1 billion valuation. These are the companies that have already reached unicorn status in 2019.

Wed, 03/20/2019 - 1:11pm

Not every tech startup can hit a $72 billion valuation like Uber, but the club of startups valued at $1 billion or more is getting bigger.

Members of this coveted group are known as "unicorns." They make up only a small percentage of all startups, but that percentage has been gradually growing.

Last year was a record-setting year for unicorns — almost 100 companies were able to woo investors and achieve ten-digit valuations, according to data from Pitchbook. As 2019 takes off, Pitchbook has been tracking the startups that have already reached unicorn status this year.

These are the tech startups whose valuations reached $1 billion in 2019:

SEE ALSO: Chocolate for breakfast and freshly-killed goat for dinner — here are the diets of some of the most notable tech billionaires

10x Genomics — Gene sequencing system

Date unicorn status achieved: January 7

Headquarters: Pleasanton, California

Year founded: 2012

Current valuation: $1.28 billion

Read more about 10x Genomics on PitchBook.

360 Enterprise Security Group — Internet cybersecurity platform

Date unicorn status achieved: January 9

Headquarters: Beijing, China

Year founded: 2015

Current valuation: $3 billion

Read more about 360 Enterprise Security Group on Pitchbook.

N26 — Mobile banking services

Date unicorn status achieved: January 10

Headquarters: Berlin, Germany

Year founded: 2013

Current valuation: $2.7 billion

Read more about N26 on Pitchbook.

See the rest of the story at Business Insider

JPMorgan's investment bank is scrapping on-campus visits in favor of video interviews and online games as Wall Street targets the next generation

Wed, 03/20/2019 - 1:00pm

  • JPMorgan's corporate and investment bank will no longer visit college campuses to recruit, asking candidates instead to submit a video interview and play some behavioral-science computer games.
  • The bank made the change to level the playing field for diverse candidates and those from schools that it wouldn't have visited in the past.
  • The bank has moved back its application process, too, to give students more time to focus on their application.

No longer coming to a school near you.

JPMorgan Chase's investment bank, one of the largest in the world, is scrapping the annual college-recruiting visits that have launched generations of investment bankers and traders. Instead, the bank will ask its next generation of workers to apply by submitting video interviews and taking online behavioral-science tests.

The company began notifying college career counselors today about the change in policy, which applies to prospective interns and has been almost a year in the making, according to a memo seen by Business Insider. The change is intended to widen the funnel for intern candidates in a way that doesn't disadvantage minorities or students from schools the bank wouldn't have visited in the past.

"This is really all about leveling the playing field," Katie Pankhurst, the head of campus recruiting North America for the bank, said.

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College career events have long been how investment banks recruit for interns and analysts, using the events to meet candidates and develop a pipeline of young talent. JPMorgan found that it was introduced to many of the recruits who made it into their intern classes through such events. It found that it wasn't getting as diverse a candidate pool as it wanted, and felt something needed to change, Pankhurst said.

JPMorgan's change is a sign that corporate employers are looking for scalable ways to reach as many candidates as possible and actively searching for members of diverse and underrepresented groups of people.

The technology will be used to vet candidates in the early rounds, before giving way to regional recruiting events where JPMorgan staff will meet candidates in person. The students will also be assigned to a mentor or guide to help them through the rest of the process, in some cases an alumnus from the same school. The bank will continue to host a Super Day where candidates come for a day of interviews and events.

See also: JPMorgan and Citigroup closed bond desks for smaller trades in favor of algorithms

"We know the student population doesn't always want to come to an event," she said. "So we decided to create a set of virtual tools that will speak to this generation of students."

In the beginning, candidates will be asked to play video games based on behavioral-science research offered by a company called Pymetrics, which says it tests for a wide range of social, cognitive, and behavioral factors, and then matches those against successful employees. Another will be a video interviews handled by HireVue, which already works with more than 700 companies, including many banks.

JPMorgan has also pushed back its timeline for choosing interns, opening the application process in June and keeping it open through September. Selections will be made and communicated through the end of the year for the following summer's internship. In the past the bank would have sent out offers in April, 15 months before the students were to walk in the door.

See also: JPMorgan flipped the banking playbook, and it's helped it find customers, sell more products, and build new branches

As the application process heats up this summer, JPMorgan will start posting short videos created by first- and second-year analysts — selfies — about what it's like to work at the bank, Pankhurst said.

JPMorgan offers the internship to college juniors, with some spots reserved for sophomores. The bank typically gets thousands of applicants and selects a few hundred.

"We know around 60% of underrepresented populations say they are underprepared when we go early," she said. "So we're giving them that summer to educate themselves and make informed decisions for their careers."

See also: JPMorgan is building a cloud-engineering hub in Seattle minutes away from Amazon and Microsoft

Other businesses within JPMorgan, such as the consumer bank or the asset-management unit, may still attend campus recruiting events, according to the memo. They haven't committed to this change.

Join the conversation about this story »

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A new Intuit survey says 68% of SMBs use an average of four apps to run their businesses — here's how they're choosing payment providers

Wed, 03/20/2019 - 12:07am

In an increasingly digitized world, brick-and-mortar retailers are facing immense pressure to understand and accommodate their customers’ changing needs, including at the point of sale (POS). 

More than two years after the EMV liability shift in October 2015, most large merchants globally have upgraded their payment systems. And beyond upgrading to meet new standards, many major retailers are adopting full-feature, “smart” devices — and supplementing them with valuable tools and services — to help them better engage customers and build loyalty.

But POS solutions aren’t “one size fits all.” Small- and medium-sized businesses (SMBs) don't usually have the same capabilities as larger merchants, which often have the resources and funds to adopt robust solutions or develop them in-house. That's where app marketplaces come in: POS app marketplaces are platforms, typically deployed by POS providers, where developers can host third-party business apps that offer back-office services, like accounting and inventory, and customer-retention tools, like loyalty programs and coupons.

SMBs' growing needs present a huge opportunity for POS terminal providers, software providers, and resellers. The US counts roughly 8 million SMBs, or 99.7% of all businesses. Until now, constraints such as time and budget have made it difficult for SMBs to implement value-added services that meet their unique needs. But app marketplaces enable providers to cater to SMBs with specialized solutions. 

App marketplaces also alleviate some of the issues associated with the overcrowded payments space. Relatively new players that have effectively leveraged the rise of the digital economy, like mPOS firm Square, are increasingly encroaching on the payments industry, putting pricing pressure on payment hardware and service giants. This has diminished client loyalty as merchants seek out the most affordable solution, and it's resulted in lost revenue for providers. However, app marketplaces can be used as tools not only to build client loyalty, but also as a revenue booster — Verifone, for instance, charges developers 30% of net revenue for each installed app and a distribution fee for each free app.

In this report, Business Insider Intelligence looks at the drivers of POS app marketplaces and the legacy and challenger firms that are supplying them. The report also highlights the strategies these providers are employing, and the ways that they can capitalize on the emergence of this new market. Finally, it looks to the future of POS app marketplaces, and how they may evolve moving forward.

Here are some of the key takeaways from the report:

  • SMBs are a massive force in the US, which makes understanding their needs a necessity for POS terminal providers, software providers, and resellers — the US counts roughly 8 million SMBs, or 99.7% of all businesses.
  • The entrance of new challengers into the payment space has put pricing pressure on the entire industry, forcing all of the players in the industry to find new solutions to keep customers loyal while also gaining a new revenue source.
  • Major firms in the industry, like Verifone and Ingenico, have turned to value-added services, specifically app marketplaces, to not only build loyalty but also giving them a new revenue source — Verifone charges developers 30% of net revenue for each installed app and a distribution fee for each free app.
  • According to a recent survey by Intuit, 68% of SMBs stated that they use an average of four apps to run their businesses. As developers flock to the space to grab a piece of the pie, it's likely that increased competition will lead to robust, revenue-generating marketplaces.
  • And there are plenty of opportunities to build out app marketplace capabilities, such as in-person training, to further engage with users — 66% of app users would hire someone to train and educate them on which apps are right for their businesses. 

In full, the report:

  • Identifies the factors that have changed how SMBs are choosing payment providers.  
  • Discusses why firms in the payments industry have started to introduce app marketplaces over the last four years.
  • Analyzes some of the most popular app marketplaces in the industry and identifies the strengths of each.
  • Breaks down the concerns merchants have relating to app marketplaces, and discusses how providers can solve these issues.
  • Explores what app marketplace providers will have to do going forward in order to avoid being outperformed in an industry that's becoming increasingly saturated. 
Subscribe to an All-Access pass to Business Insider Intelligence and gain immediate access to: This report and more than 250 other expertly researched reports Access to all future reports and daily newsletters Forecasts of new and emerging technologies in your industry And more! Learn More

Purchase & download the full report from our research store


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4 portfolio managers have exited asset management giant Nuveen after their funds took a hit in 2018

Tue, 03/19/2019 - 10:31pm

  • Four portfolio managers have left $930 billion asset manager Nuveen.
  • James Diedrich, Harold Goldstein, Mark Traster, and Derek Sadowsky exited three funds with a collective $1.7 billion in assets. 
  • A Nuveen spokesman said: “We routinely evaluate our organization to ensure that we are delivering investment excellence to our clients and align our portfolio management teams accordingly.”

Four portfolio managers have left Nuveen, the $930 billion asset manager, according to a person familiar with the matter.

James Diedrich, Harold Goldstein, Mark Traster, and Derek Sadowsky are no longer leading three equity funds with a collective $1.7 billion in assets, according to filings with the Securities and Exchange Commission on Tuesday.

The source told Business Insider the four had left the firm. The men did not respond to requests for comment.

“We routinely evaluate our organization to ensure that we are delivering investment excellence to our clients and align our portfolio management teams accordingly," a spokesman for Nuveen said. He could not be reached for further comment.  

Nuveen is the investment arm of TIAA. 

See more: The CMO of $998 billion asset manager Nuveen explains how the brand is trying to stand out in an increasingly crowded field

For the $484 million Nuveen Mid Cap Growth Opportunities Fund, Gregory Ryan is taking the place of Diedrich and Goldstein, who have been portfolio managers since 2006 and 2005, respectively. That fund returned -8.9% in 2018, while the Russell Midcap Growth Index dropped 4.75%, according to Nuveen's website

Ryan is also continuing as portfolio manager for the $106 million Nuveen Small Cap Select Fund, and Jon Loth was added as portfolio manager. Traster, who has been a portfolio manager since 2008, is no longer with the fund. The fund returned -11.06% in 2018, in line with the Russell 2000 Index. 

And at the $1.1 billion Nuveen Asset Management Dividend Value Strategy fund, Sadowsky, who has been a portfolio manager since 2012, has left. He was replaced by Evan Staples. Co-portfolio manager David Chalupnik will continue in his role. The fund returned -9.11% in 2018, while the Russell 1000 Value Index lost 8.27%.

NOW READ: Ken Griffin's $30 billion Citadel has cut several stock-pickers

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Beyond Bitcoin: Here are some of the new use cases for distributed ledger technology

Tue, 03/19/2019 - 9:05pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

Of the many technologies reshaping the world economy, distributed ledger technologies (DLTs) are among the most hyped. DLTs are most often associated with cryptocurrencies like Bitcoin, but such coverage sidelines the broader use cases of DLTs, even though they stand to make a far bigger impact on the broader the financial services (FS) industry.

DLT's value lies in its ability to centralize record-keeping, while cutting out the need for authorization by an overseeing party, instead allowing a record to be confirmed by multiple parties with access to the database. This means DLTs have the potential to streamline financial institutions' (FIs) operations, boost data security, improve customer relationships, and drastically cut costs. But many FIs have struggled to implement DLTs and reap the rewards, because of organizational obstacles, but also because of issues rooted in the technology itself. There are a few players working to make the technology more usable for FIs, and progress is now being made.

In a new report, Business Insider Intelligence takes a look at what DLTs are and why they hold so much promise for FS, the sectors in which DLTs are gaining the most traction and why, and the efforts underway to remove the obstacles preventing wider DLT adoption in finance. It also examines the few FIs close to unleashing their DLT projects, and how DLTs might transform the nature of FS if adoption truly takes off. 

Here are some of the key takeaways from the report:

  • DLTs are proving attractive to FIs because of their ability to act as a single source of truth, distribute information securely, cut out middlemen, improve transaction times, and cut redundancy and costs.
  • DLTs like blockchain and smart contracts stand to save the FS industry up to $50 billion a year through improved operational efficiencies, reduced human error, and better regulatory compliance. 
  • The technology is being explored actively across FS, with trade finance, insurance, and capital markets proving especially active. Overall adoption is still low because of organizational and technical hurdles, but these are now being eliminated, promising to boost implementation.
  • A few FIs have pulled ahead of the curve and are very close to taking their DLT projects live, if they haven't already. These players can serve as useful case studies for other institutions in getting their DLT solutions live.

In full, the report:

  • Looks at what DLTs are, and why the FS industry is working hard to make use of them. 
  • Gives an overview of the financial segments which are seeing the most DLT activity, and what they stand to gain.
  • Outlines efforts being made to make DLT more approachable and usable for the FS industry.
  • Examines use cases in which FIs have managed to take their pilots live, and what they can teach their peers. 
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An off-duty pilot reportedly prevented a Boeing 737 Max 8 crash, one day before the same plane crashed and killed 189 passengers and crew (BA)

Tue, 03/19/2019 - 9:02pm

  • An off-duty pilot riding in the cockpit of a Boeing 737 Max 8 fixed a malfunction on the second-to-the-last flight for the aircraft before same plane crashed during a different flight in the Java Sea the next day, Bloomberg reported on Tuesday evening.
  • The pilot reportedly advised the crew to kill the power to a motor that was pointing the aircraft's nose downward. That move helped prevent a catastrophe, according to Bloomberg.
  • The aircraft was being operated by a different crew the next day, on October 29, 2018, and crashed fewer than 15 minutes after takeoff, killing all 189 passengers and crew on board.
  • That same system is under intense scrutiny as authorities continue to investigate another crash involving the 737 Max.

An off-duty pilot riding in the cockpit of a Boeing 737 Max 8 fixed a malfunction during the second-to-the-last flight for the aircraft before it crashed into the Java Sea the next day, according to a Bloomberg report published on Tuesday that cited two people with knowledge of the investigation in Indonesia.

The Lion Air crew members reportedly received the help from the off-duty pilot, who fixed a malfunctioning sensor from an automated system designed to prevent the plane from stalling. The pilot advised the crew to kill the power to a motor that was pointing the aircraft's nose downward, Bloomberg reported, citing the people with knowledge of the investigation.

The same plane, which was being operated by a separate crew, crashed into the Java Sea near Indonesia the next day, on October 29, 2018. All 189 passengers and crew on board were killed.

A Lion Air spokesman did not provide additional comment on Bloomberg's findings.

Read more: The US government wants to audit how the Boeing 737 Max got approved to fly by the FAA

"All the data and information that we have on the flight and the aircraft have been submitted to the Indonesian National Transportation Safety Committee," a spokesperson told Bloomberg. "We can't provide additional comment at this stage due the ongoing investigation on the accident."

The 737 Max's automated safety feature has been under intense scrutiny after the Ethiopian Airlines Flight ET302 crash that killed all 157 passengers on March 10, five months after the Lion Air crash.

As Boeing and aviation authorities investigate the incidents, initial reports suggest that a faulty reading from a sensor could have played a role in both crashes. The reports indicated that the faulty sensor may have triggered the plane's automated system and pointed the nose downward after takeoff.

After the crash, other countries grounded the 737 Max aircraft, including China, which has the most number of 737s. The US was the last country to ground the plane.

SEE ALSO: Trump just nominated a permanent FAA head — more than a year after the last one left

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Thousands of female economists say they've been sexually assaulted or discriminated against by colleagues

Tue, 03/19/2019 - 7:48pm

  • In a new survey, women working in the economics field described a workplace that is hostile and even unsafe at times.
  • More than 250 female economists said in the survey that a colleague had sexually assaulted them or attempted to do so over the past decade, while thousands reported harassment and discrimination. 
  • Reports of bias against race and sexual orientation were also seen in the results.

Female economists have for years dealt with pervasive sexual misconduct and discrimination in workplaces across the US, according to a new report highlighting unequal treatment in a field dominated by white men.

In an American Economic Association survey released this week, women in the economics field described a workplace that was hostile and even unsafe at times. Widespread reports of bias against gender, race, and sexual orientation were also seen in the results, which were gathered last year from more than 9,000 economists.

"I consider the findings in the AEA survey highly disturbing," said Janet Yellen, the former chair of the Federal Reserve and president-elect of the association. "They show that all too many women in the profession consider the climate unconducive to their success, and there are an unacceptably large number of reports of outright sexual harassment."

More than 250 female economists said in the survey that a colleague had sexually assaulted them or attempted to do so throughout their careers. Nearly 2,000, meanwhile, said they had been subjected to inappropriate sexual remarks or unwanted advances in the workplace.

These issues have come into focus in recent months, most recently in 2018 when a prominent Harvard economist resigned over sexual harassment allegations from staff. About a year earlier, a University of California at Berkeley study found overwhelming hostility toward female economists online.

The most recent findings only confirm what many in the field have suspected for awhile, said Jason Furman, a Harvard University professor who served as a top economic adviser to former President Barack Obama.

"It is not so much a wake up call as a continued ringing of the alarm which started going off a year or so ago," he said.

While an increasing number of women have joined related fields in recent years, gender gaps have mostly persisted in economics. The rate of women studying to become professional economists has barely budged over the past decade and a half, according to a separate AEA report from 2017.

Economists say that has created an echo chamber of sorts, limiting voices in teaching and research. Nearly 70% of women in the survey felt their work wasn't taken as seriously as their colleagues, compared with less than half of men. Some even passed up opportunities in the field, with nearly half declining to speak at conferences or ask questions in order to avoid possible harassment.

Mary Lovely, an economist at Syracuse University and a senior fellow at the Peterson Institute for International Economics, said that while discrimination has become more subtle over the years, it still hangs over her day to day work.

"Many men believe they themselves are not part of the problem, yet they continue to organize sessions without any women authors or discussants," she said. "And I still am present at meetings where women's views are heard and then trivialized."

The AEA announced several measures Monday designed to combat issues found in the survey, vowing to address both overt and more subtle cases of harassment and discrimination in economics. Those include an updated code of conduct and enforcement rules, as well as plans to hire an association official to deal with complaints and investigations.

"It is time for the profession to change, even if some parts of it have to be prodded into better behavior," Lovely said.

Women aren't the only ones dealing with a hostile environment in economics. Less than a third of minority economists said their race was respected in the field. More than 90% of those who don’t identify as straight felt that their sexual orientation was not accepted. Many of these groups recalled dodging opportunities or social events out of fear of harassment and discrimination, reports rare among white and heterosexual men in the survey.

"I was stunned," said Austan Goolsbee, who was chair of the Council of Economic Advisers in the Obama White House. "The report is awful. The profession has to do better at protecting and supporting people. It's inexcusable."

SEE ALSO: White House says Trump will drive a US economic boom lasting 10 years, a prediction virtually no serious economists agree with

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An internet pioneer is doubtful Mark Zuckerberg can refocus Facebook on privacy. Here's why. (FB)

Tue, 03/19/2019 - 7:12pm

  • Internet pioneer Paul Vixie is dubious about Facebook CEO Mark Zuckerberg's plan to create a "privacy focused" social networking platform.
  • Vixie, the CEO of Farsight securities, has worked on privacy and security issues for decades.
  • The concepts of "private" and "social" are fundamentally at odds, and no one yet has figured out a way to blend the two, he said.
  • Facebook may be feeling constrained by Europe's new privacy law, which illustrates how difficult it can be to promote both privacy and a social-based business, he said.

When it comes to Mark Zuckerberg's plan to transform Facebook by emphasizing "privacy-focused" social networking, count Paul Vixie as a skeptic. 

The concepts of private and social are, by their nature, at odds with one another, says Vixie, the CEO of Farsight Security. Vixie, who helped create some of the founding technology underlying the internet and has worked for decades on privacy and security issues, is dubious that Facebook will be able to find some middle ground in between them and still be able to have a fast-growing business.

"Private is not social, and social is not private. And so, if you're doing one, you're not doing the other," he said. "Please make up your mind."

"At the moment, the Venn diagram doesn't have any overlapping circles," he continued. "So, I'm not going to say it can't be done, but I will say that I'm not convinced."

Zuckerberg laid out his plans to build a "privacy-focused platform" in a blog post earlier this month. As envisioned by Zuckerberg, the new platform will allow users to interact privately via end-to-end encryption. It will also connect the company's various messaging services, allowing Instagram users to exchange messages with those on WhatsApp or Facebook Messenger. The company plans to reconstruct several of its services with these ideas in mind, he said.

Read this: Facebook says it will move to encrypted, auto-deleting messages — and warns that some countries might decide to ban it

Facebook's CEO didn't explain how the company would make money off the its new privacy-centric services, although he suggested that Facebook will build into them the ability for corporations to connect with consumers and for consumers to be able to purchase goods through them. Ostensibly, Facebook would charge companies for such services.

Right now, almost all of the social-networking company's revenue has come from digital advertising. The ad-targeting machine the company has built has allowed it to build a huge and fast-growing business that has allowed it, along with Google, to dominate the digital advertising industry. 

New privacy laws could disrupt Facebook's ad business

But Facebook may be starting to feel that its advertising efforts are being constrained, Vixie suggested. Under the European Union's General Data Protection Regulation, which took effect last year, companies such as Facebook can't collect or share data from European users without first getting their permission.

Indeed, that law illustrates how the concepts and values of "privacy" and "social" are fundamentally opposed, Vixie said. The law seeks to protect European citizens' privacy by giving them control and ultimate say over their data. In so doing, the law threatens to disrupt the social-networking giant's advertising business. 

For that business, Facebook has collected copious amounts of data about its users, both based on what they post on the site and their interactions off of it. It's encouraged users to share ever more data about themselves by introducing new social features and has made itself valuable to advertisers by allowing them to access such data to target individuals or groups of users.

But GDPR could preclude Facebook from iterating on that business by widely rolling out new advertising services or other features, Vixie said. Facebook couldn't offer such features to individual users — at least in Europe — unless and until they agreed, one by one, to allow the company to access and use whatever data it needed for those services, he said.

And it could soon face similar difficulties elsewhere. California last year passed a privacy law that's similar to GDPR, and other governments are looking at it as a model for their own privacy legislation.

If Facebook has to get every user to click "yes" on a checkbox every time it wants to introduce a new feature, "it would mean that they could no longer operate as a hyper-scale company," Vixie said, adding that "hyperscale is what lets them have a share price that is such a high multiple of their earnings."

Got a tip about a startup or other tech company? Contact this reporter via email at, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: Facebook is reportedly considering paying a record multibillion-dollar fine to settle the FTC's investigation into its privacy practices

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12 facts that show why bottled water is one of the biggest scams of the century

Tue, 03/19/2019 - 7:01pm

  • Nearly 780 million people worldwide do not have access to a source of clean water (water that flows through a household connection, borehole, well, or protected spring).
  • In the US, 99.2% of the country has access to clean tap water, but many Americans chose to drink bottled water instead due to concerns about poor taste and contamination
  • Bottled water and clean tap water are virtually identical in terms of purity and taste. In a 2011 study, only one-third of blind taste-testers could correctly identify tap versus bottled water.
  • Unlike tap water, however, producing bottled water is an expensive, resource-heavy process that requires crude oil and extra water. 

There's nothing quite like the feeling of a pure, ice-cold drink of water.

While some Americans get water from the tap, the rest pay for the bottled variety — at a cost of $100 billion a year.

The average cost of a gallon’s worth of single-serve bottled water in the US is nearly $9.50, according to FoodandWaterWatch. That's nearly three times more expensive than the average price for a gallon of milk, and almost four times the average price for a gallon of regular gasoline. Bottled water costs nearly 2,000 times more than tap water, which costs less than a cent per gallon.

Many people assume that the higher price tag is justified by the health benefits of bottled water, but in most cases, that's not true.

This year's World Water Day falls on March 22 — the day is meant to draw attention to disparities in clean-water access around the globe. Worldwide, 780 million people don't have access to a source of clean water.

But for the vast majority of Americans, tap water and bottled water are comparable in terms of healthiness and quality. In some cases, publicly sourced tap water may actually be safer, since it is usually tested more frequently, Plus, bottled water is more likely to be contaminated by microplastic particles than tap water.

"It is wrong to assume that bottled water is somehow cleaner, healthier, or safer than tap water in the US," Peter Gleick, an environmental scientist and the co-founder of the Pacific Institute, told Business Insider.

There are exceptions, however: Water that comes from people's private wells do not see the same rigorous testing as those whose water comes from public sources. And, as was the case Flint, Michigan, some public sources are not properly screened.

Nonetheless, there are plenty of reasons for most people to stop shelling out for bottled water. Here's what to know.

SEE ALSO: Bottled water is a scam for most Americans, but a new report reveals some surprising places where it's dangerous to drink the tap

The first documented case of bottled water being sold was in Boston, Massachusetts in the 1760s. A company called Jackson's Spa bottled and sold mineral water for "therapeutic" uses.

Companies in Saratoga Springs and Albany also packaged and sold water.

Americans consume more packaged water overall than people in any other country in the world except China.

Across the globe, people drink roughly 10% more bottled water every year. On a per-capita basis, the US ranks number six in bottled water consumption.

Today, Americans today drink more bottled water than milk or beer. Each person consumes roughly 39 gallons of bottled water annually.

Source: Beverage Marketing Corp.

See the rest of the story at Business Insider

REGTECH REVISITED: How the regtech landscape is evolving to address FIs' ever growing compliance needs

Tue, 03/19/2019 - 6:05pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

Regtech solutions seemed to offer the solution to financial institutions' (FIs) compliance woes when they first came to prominence around 24 months ago, gaining support from regulators and investors alike. 

However, many of the companies offering these solutions haven't scaled as might have been expected from the initial hype, and have failed to follow the trajectory of firms in other segments of fintech.

This unexpected inertia in the regtech industry is likely to resolve over the next 12-18 months as other factors come into play that shift FIs' approach to regtech solutions, and as the companies offering them evolve. External factors driving this change include regulatory support of regtech solutions, and consultancies offering more help to FIs wanting to sift through solutions. Startups offering regtech solutions will also play a part by partnering with each other, forming industry organizations, and taking advantage of new opportunities.

This report from Business Insider Intelligence, Business Insider's premium research service, provides a brief overview of the current global financial regulatory compliance landscape, and the regtech industry's position within it. It then details the major drivers that will shift the dial on FIs' adoption of regtech over the next 12-18 months, as well as those that will propel startups offering regtech solutions to new heights. Finally, it outlines what impact these drivers will have, and gives insight into what the global regtech industry will look like by 2020.

Here are some of the key takeaways:

  • Regulatory compliance is still a significant issue faced by global FIs. In 2018 alone, EU regulations MiFID II and PSD2 have come into effect, bringing with them huge handbooks and gigantic reporting requirements. 
  • Regtech startups boast solutions that can ease FIs' compliance burden — but they are struggling to scale. 
  • Some changes expected to drive greater adoption of these solutions in the next 12 to 18 months are: the ongoing evolution of startups' business models, increasing numbers of partnerships, regulators' promotion of regtech, changing attitudes to the segment among FIs, and consultancies helping to facilitate adoption.
  • FIs will actively be using solutions from regtech startups by 2020, and startups will be collaborating in an organized fashion with each other and with FIs. Global regulators will have adopted regtech themselves, while continuing to act as advocates for the industry.

In full, the report:

  • Reviews the major changes expected to hit the regtech segment in the next 12 to 18 months.
  • Examines the drivers behind these changes, and how the proliferation of regtech will improve compliance for FIs.
  • Provides our view on what the future of the regtech industry looks like through 2020. Get The Regtech Revisited Report


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Regulators just approved a new depression drug with the potential to be a game-changer (SAGE)

Tue, 03/19/2019 - 5:50pm

  • On Tuesday, federal regulators approved the second new antidepressant this month after 35 years of little progress combatting the disease.
  • An injection called Zulresso, the new drug treats post-partum depression (PPD).
  • PPD occurs after childbirth and is thought to affect roughly one in every 6 women.
  • This month's two new approved drugs could work faster and last longer than previous medications.

Federal regulators have just given the green light to a second new kind of antidepressant this month, after decades of little progress combating the disease.

The US Food and Drug Administration on Tuesday approved an injection branded Zulresso that is made by biotech company Sage Therapeutics. The drug, known as brexanalone, treats people who experience depression after giving birth, a condition known as post-partum depression (PPD).

"This approval marks the first time a drug has been specifically approved to treat postpartum depression, providing an important new treatment option," Tiffany Farchione, the FDA's acting director in the division of psychiatry products, said in a statement.

About two weeks ago, the FDA approved a treatment for severe depression called esketamine from Johnson & Johnson.

In contrast to the past 35 years of depression medications, neither of the new drugs is a pill. One is a nasal spray and the other is an injection.

New approaches to treating depression, a disease that affects 16 million Americans

Both drugs take new tacks to treating depression that have not been seen by other approved medications. Instead of homing in on the brain's serotonin network — as all the available medications have for the past four decades — the new drugs zero in on unique parts of the brain thought to affect our mood.

Because of that, reviewers hope the drugs will offer faster and longer-lasting solutions — primarily for people who've tried and failed to see benefits with existing medications.

Sage's drug affects the brain's Gaba network, which is believed to play a role in anxiety. It was created for mothers with post-partum depression. PPD is estimated to affect as many as 400,000 Americans each year.

Johnson & Johnson's drug, esketamine, is inspired by ketamine and works on a brain system known as the NMDA system. It's designed to treat severe depression.

One of the biggest potential upsides of Sage's drug is the fact that it would not need to be taken daily like a traditional antidepressant. It also appears to work quickly, taking effect within hours, unlike current depression pills, which can take weeks to start working. The effects of Zulresso may last as far out as 30 days, the period of time researchers analyzed for the company's clinical trials.

The company is also studying a pill version of its new injectable in a broader set of mental illnesses including major depression and bipolar disorder. Analysts expect that drug, known only as Sage-217, to have blockbuster appeal for the 16 million Americans with severe depression unrelated to childbirth.

The official approval for brexanolone follows a favorable vote from outside experts convened by the FDA last fall. In November, the panel voted 17-1 in favor of the treatment, which they decided carried more benefits than risks for patients. Still, the new drug has important risks and side-effects.

Experts are hopeful about Sage's new injectible drug, but they're more excited about its related pill

Analysts and clinicians said they were hopeful about the new approval for several reasons. They believe it adds options for a disease that currently has no approved medications. They also expect the news to bode well for Sage's related drug — the oral pill called 217 that's in an earlier stage of research but targets the same part of the brain as the injection.

Together, Zulresso and 217 "have the potential to change the treatment paradigm for treating mood disorders," wrote Yatin Suneja, a senior biotech analyst with investment firm Guggenheim, in a report circulated last month. Suneja added that the firm expected the two drugs to generate sales in the range of $3-5 billion across diseases including major depression, PPD, and potentially bipolar disorder.

Assuming that 217 gets approved as well, Sage sees both drugs as helping to provide more options to people with mental illness.

"We think these two products can live in this market and help create choice for patients," Sage's chief business officer, Michael Cloonan, told Business Insider.

Still, there are barriers to Sage's new injectible that are not seen with traditional antidepressants.

Unlike a daily pill, brexanalone must be given to patients by way of an IV, similar to how the anesthetic ketamine is administered for depression. And the dosing for Sage's drug happens over the course of two-and-a-half days — meaning someone would have to come into a clinic and stay overnight while they are monitored by a professional.

Sage's new drug could also have a steep price tag. The company said it will charge $34,000 for one course of treatment, and it's still unclear how much of that insurance would cover.

Sage's new drug can have a serious side effect

Brexanolone also comes with side effects that include headaches, drowsiness, and dizziness. Additionally, out of 140 women given the drug in a clinical trial, six of them temporarily lost consciousness during the treatment, according to data compiled by the FDA in advance of the expert panel convened last fall.

Although a serious potential side effect, the FDA-assembled panel also said it was the only "major safety concern" observed with Sage's drug. To address it, regulators will require patients to visit approved clinics for the drug where they can be monitored for several days.

Wall Street analysts expect the recent approval to also bode well for Sage's oral drug candidate, 217.

Read more: A drug that works differently from all existing depression drugs just got a big boost

Unlike brexanolone, 217 could be taken by mouth without the need for specialty clinics. Plus, 217 is being studied for use in a wider range of brain diseases including major depressive disorder, bipolar disorder, and insomnia.

"The possibility of having something that impacts the Gaba system is attractive because if you were to launch it tomorrow, there's likely going to be lots of patients who've failed with anything that's available," Paul Matteis, the managing director of biotech research with brokerage firm Stifel, told Business Insider.

And like Sage's injection, the oral pill may act faster than traditional medications and also not require daily dosing. In clinical trials looking at patients who took the drug once, its effects appeared to last as long as four weeks. 

That's something that Matteis said sounds like it would be "preferred by most patients [over] having to take something indefinitely."

"We’re trying to change the paradigm," Cloonan said. "We want patients to take this medicine when they need it, not when they don’t."

SEE ALSO: Regulators just approved the first new depression drug since the 1980s, and some see blockbuster potential

DON'T MISS: A Silicon Valley VC in the hottest area of healthcare explains what it looks for in new startups aiming to disrupt the $35 billion addiction market

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Tencent Music sinks after online-music revenue per user comes up short (TME)

Tue, 03/19/2019 - 5:07pm

  • Tencent Music Entertainment beat on both the top and bottom lines.
  • Buts its monthly average revenue per paying user for its online-music business fell 1% year-over-year.
  • Shares were down more than 6% to $17.42 apiece after the announcement.
  • Tuesday's report was Tencent Music's first since going public in the US in December.
  • Watch Tencent Music Entertainment trade live.

Tencent Music Entertainment, the biggest streaming-music service in China, reported better-than-expected earnings for the fourth quarter. But shares were down more than 6% to $17.42 apiece after monthly average revenue per paying user.

Here are the key numbers, compared to what analysts surveyed by Bloomberg were expecting:

  • Adjusted earnings per share: 0.59 Chinese yuan ($0.09) versus 0.55 Chinese yuan expected 
  • Revenue: 5.4 billion Chinese yuan ($785 million) versus 5.3 billion Chinese yuan expected
  • Monthly Average Revenue Per Paying User - online music: 8.6 Chinese yuan, down 1.1% year-over-year
  • Monthly Average Revenue Per Paying User - social entertainment: 126.7 Chinese yuan, up 24.3% year-over-year

"Our initial public offering in December 2018 has launched us onto the international stage, elevated the global recognition towards our brand, and endorsed our successful track record," Kar Shun Pang, CEO of Tencent Music said in a press release. 

"During the fourth quarter of 2018, we recorded strong growth across our business lines, including both online music and social entertainment services, and solidified our market leadership."

This is the first time that Tencent Music has released earnings since going public in the US in December. The company postponed its initial public offering for two months over fears that the brutal sell-off that wreaked havoc on markets in October and November would affect its pricing. Tencent Music's offering raised $1.1 billion, making it the fourth-largest Chinese IPO by deal value last year. 

Tencent Music operates several popular music brands in China — including QQ Music, Kugou, Kuwo and WeSing — and had more than 800 million unique monthly active users in the second quarter of 2018, according to its filing.

Tencent Music was up 48% this year through Tuesday.

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How tech giants are using their reach and digital prowess to take on traditional banks (GOOG, GOOGL, AAPL, FB, MSFT, AMZN)

Tue, 03/19/2019 - 5:07pm

This is a preview of a research report from Business Insider Intelligence, Business Insider's premium research service. To learn more about Business Insider Intelligence, click here.

As headlines like "Amazon Is Secretly Becoming a Bank" and "Google Wants to Be a Bank Now" increasingly crop up in the news, tech giants are coming into the spotlight as the next potential payments disruptors.

And with these firms' broad reach and hefty resources, the possibility that they'll descend on financial services is a hard narrative to shy away from. To mitigate potential losses under this scenario, traditional players will have to grasp not only the level of the threat, but also which segments of the financial industry are most at risk of disruption.

Google, Apple, Facebook, Amazon, and Microsoft, collectively known as GAFAM, are already active investors in the payments industry, and they're slowly encroaching on legacy providers' core offerings. Each of these five companies has introduced features and offerings that have the potential to disrupt specific parts of the banking system. And we expect a plethora of additional offerings to hit the market as these companies look to build out their ecosystems.

However, it remains unlikely that any of these firms will become full-blown banks or entirely upend incumbents, due to regulatory barriers and the entrenched positions of big banks. Moreover, consumers still trust traditional firms first and foremost with their financial data. That means these companies are far more likely to rattle the cages of incumbents than they are to cause their total demise. That said, these companies have a proven capacity to revolutionize industries, making their entry into payments critical to watch for legacy players, especially as their moves demonstrate an intent to be a disruptive force in the industry.

In this report, Business Insider Intelligence analyzes the current impact GAFAM is having on the financial services industry, and the strengths and weaknesses of each firm's position in payments. We also discuss the barriers these companies face as they push deeper into financial services, as well as which aspects of a bank’s core business provide the biggest opportunities for the new players. Lastly, we assess these companies' future potential in payments and the broader financial services industry, and examine ways incumbents can manage the threat.

Here are some of the key takeaways: 

  • GAFAM has been actively encroaching on the payments space. This includes offering mobile wallets for in-store and online payments, peer-to-peer money transfer services, and even loans for small- and medium-sized businesses. 
  • These firms' broad reach and hefty resources have put them in a strong position to take on legacy players. GAFAM has products that have been adopted by millions of users, and in some cases, billions. They also have access to a tremendous amount of capital — Apple, Microsoft, and Google had over $400 billion combined in cash at the end of 2016.
  • However, these firms have to overcome major barriers to compete against legacy players, which includes regulation and trust. For example, 60% of respondents to a Business Insider Intelligence survey stated that they trust their bank most to provide them financial services.
  •  As a result of these barriers, it's more likely that GAFAM will make a dent in very specific segments of the financial services industry rather than completely disrupt it. 

In full, the report:

  • Explains what GAFAM's done to place themselves in a position to be the next potential payments disruptors.
  • Breaks down the strengths and weaknesses of each company as it relates to their ability to build out an extensive financial ecosystem. 
  • Looks at the potential barriers that could limit GAFAM's ability to capture a significant share of the payments industry from traditional players. 
  • Identifies what strategies legacy players will have to deploy to mitigate the threat by these tech giants.
Get The Tech Companies in Payments Report


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There are 3 things to understand about investing if you want to make money in the stock market

Tue, 03/19/2019 - 5:01pm

  • Learning how to invest in stocks doesn't have to be complicated.
  • The best place to start investing is typically in a retirement account, using low-cost index funds or a robo-advisor.
  • Three factors affect how well your portfolio performs in the stock market: How much you invest, how long you invest, and your rate of return.
  • To minimize risk, diversifying your investments across different types of companies, industries, and countries is key.

Investing is anyone's game. And putting money in the stock market while you're young is one of the best — and easiest — ways you can set yourself up for a comfortable retirement.

But the reality is many people, especially younger Americans, don't invest. Millennials are the only generation to favor cash over investing in the stock market, according to a Bankrate survey.

ESI Money, a blogger who retired at 52 with a $3 million net worth, said "waiting to invest" is one of the "worst money moves anyone can make."

After all, investing your savings in the stock market, rather than keeping all of it in cash, could amount to a difference of up to $3.3 million over 40 years.

How much could your investments grow by the time you retire? Find out with this calculator from our partners:


Luckily, investing isn't as complicated as it seems. According to ESI Money, there are three factors that determine how well your investments will perform:

1. Your timeline

ESI Money crunched the numbers and found that time is the most important factor in how well your investments perform. "[T]he longer you wait to save and invest, the more you're costing yourself," he said.

In other words, it's all about maximizing the benefit of compound interest.

Take a look at the chart below, which illustrates the difference in savings for a 15-year-old who puts $1,000 of their summer job earnings into a Roth IRA — a retirement account where your savings grow tax-free — for four years and then stops, and a 25-year-old who puts away $1,000 until age 28 and stops.

Assuming a 7% annual rate of return, the early saver will have nearly twice as much money saved by age 65 as the late saver, with no extra effort whatsoever. Even if the late saver continued putting away that same amount until age 30, they'd still come up short.

The best way to maximize earnings is to keep saving and investing consistently, but the idea remains: The more time your money has to grow, the more you'll likely end up with.

2. How much you invest

How much money you earn in the stock market will be based partially on how much you invest. The good news is that you don't have to invest a ton of money to earn a lot over time. You can easily start by contributing 15%, 10%, or even 5% of your pre-tax income to a retirement account, like a 401(k) or IRA.

If you're worried about investing too much money for fear of losing it, don't. Stock market investors had over a "99% chance of maintaining at least their initial investment" — the same as a traditional savings account, according to a NerdWallet analysis of 40 years of historical returns.

3. The return rate

The NerdWallet analysis also found that investors had a 95% chance of earning nearly three times their initial investment, while traditional savers had less than a 3% chance of tripling their investment.

Still, the rate at which your money grows is completely out of your control. That's the nature of the stock market — not even legendary investor Warren Buffett can guarantee big returns.

Ultimately, you're doing well if your investment outpaces inflation, which won't happen if your money is shored up in a bank account with low interest rates. To minimize risk, diversifying your investments across different types of companies, industries, and countries is key.

You can start by investing in a low-cost index fund that does the diversification for you, like the Vanguard Total Stock Market Index Fund

Another increasingly popular tool for novice investors are robo-advisors, which use an algorithm to build and manage your portfolio for a low annual fee. Just make sure you're not paying annual fees higher than 0.5% on any "low-cost" investment account or it'll eat into your returns. Wealthfront and Betterment can be good fits for people who want to start investing with small portfolios and "set it and forget it." 

ESI Money sums up the winning formula best: "Save early, save often, and save more as time goes by."

Want more investment options? Our partners Ally Invest and Wealthsimple can help you get started. 

SEE ALSO: I made a mental shift to start saving more money and I'd recommend it to just about anyone

DON'T MISS: There are 3 fundamental money concepts most people still don't grasp

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