You Can't Stop Rock and Roll

Here it comes, you're never gonna top it

On a run, no way you can stop it

Total style, perfection in decay

Running wild, flat out all the way

--Dee Snider (Twisted Sister), 1983

The broadest of equity market indices closed Thursday at all-time highs. As did the far more elite and narrow. The S&P 500, the Nasdaq Composite, the Dow Jones Industrial Average -- hard chargers, all. How about the small-caps? Both the Russell 2000 and the S&P 600 closed at 16-month highs. Same for the Transports. Pick a measure for equity market performance. Any measure. Throw a dart if you have to. Good chance that wherever that "dart" sticks, you've won a prize. A prize that rallied hard into the close, at the top of its charts.

The yield spread (3mo/10yr) that I constantly mention did manage to ease back a few basis points. This allowed growth stocks to regain their position at the top of our daily performance standings after a few days of market support having been drawn from more defensive sectors. So, it was that semiconductor stocks and software names led the Information Technology sector, hand in hand, to the top of that leader-board. Industrials, however were right behind tech for the day, which makes perfect sense. Just a day after the U.S. and China had agreed to their Phase One trade deal, the U.S. Senate passed the USMCA trade pact that will replace NAFTA, restoring and perhaps improving conditions of trade with Mexico (our largest trading partner) and Canada.

Those two deals, if executed by all parties to the letter of what has been agreed to, would (could?) add more than a percent to U.S. GDP over two years, depending on what economic opinion you read. The only thing they do agree on is that both deals are positive if properly executed.

So, where does that leave us? A market that is now in something well beyond what I would call a confirmed upward trend. Alphabet (GOOGL) joined the $1 trillion market-cap club on Thursday. Any dents in the armor? Any at all? On an intra-day basis, trading volume ebbed just a bit. That said, winners trounced losers at both of New York's exchanges, and advancing volume beat declining volume at those exchanges by nearly an aggregate 3 to 1. Given the way stocks closed, lower volume may have simply been the result of lesser supply than lack of interest. The appetite was there.

Valuation is now at19x forward-looking earnings. Will earnings catch up to valuation? Do they even need to? The answer is yes, they do. But maybe not today, or even this quarter. We already know, at least I think we know, that Q4 earnings are not going to bring home the roses. I also think that we know that in this era of compressed prices for credit over time -- married to loose fiscal policy and then mixed with an aggressive plan to add liquidity by the central bank -- the environment for elevated valuation metrics is indeed justified.

It really is all about adapting to, and excelling in, the environment provided. I think we all agree that the Fed cannot add liquidity to the mix forever, or at least not at the pace in place since the September cash market mini-crisis. In a perfect world, the deals now in place and in the works with U.S. trading partners not only maintain, but accelerate economic growth to the point where large-cap corporate earnings growth turns positive for the year after what will be four consecutive quarters of contraction.

Can this fairy tale ending play out the way we all would like to see? Oh, it can. I learned a long time ago to never fully discard any possibility. That said, even if the porridge is just right and everything ends up working out perfectly for Goldilocks, this is an election year and there remains what appears to be permanently elevated levels of both political and geopolitical risk.

At a minimum, there will be heightened headline risk to equity valuations. Beyond that? The risk that the central bank becomes uncomfortable with the current balance sheet expansion before the economy -- and by extension equity valuations -- are ready to hold their gains based on fundamental support. No, you can't stop Rock& Roll, but Rock& Roll can stop. With or without you.

Long-time readers know that I have been an advocate in the past of having the Treasury Department create more vehicles for long-term investment (aka long-term borrowing). I mean, we all get the whole "issue a ton of short-term paper and have the Fed gobble it up at artificially created price points" thing. It makes sense in this environment. It would make sense forever, if the rapid and reckless expansion of the monetary base just to allow the federal government broad access to funding while anchoring the short end of the curve forever, came with no strings attached and no risk.

That said, when the Fed picks up its football and goes home, Treasury is going to have to issue debt securities -- and a whole lot of them -- at distant maturities, if only to keep the wolves at bay. On Thursday, Treasury announced that at some point in the first half of 2020,it will start issuing 20-year paper. Detailswill follow at Treasury's quarterly refunding announcement on February 5 (which in unrelated news, also happens to be the day of the Macy's (M) investor event at the New York Stock Exchange)

To that news, I say that it's about time. I add that Treasury needs to push out 40- and 50-year paper as well, as I seriously doubt that anyone in Washington is ever going to try to tackle the federal government's budget deficit until the day we wake up and the problem has moved beyond what is considered addressable through the normal application of policy.

Don't get me wrong, I have always been invested in energy, or you might say "big oil." Despite fluctuations in sector valuation, there is nothing like knowing one can count both strong cash flow and, by extension, a robust return to shareholders. All one needs is the minimum in risk management adaptability to keep these names performing if not with the broader market, at least in positive territory.

Green, or ESG-based (Environmental, Social and Governance) investing is here to stay, and those of us who pull our living from the financial marketplace better recognize this change in both investment trends and trends in capital spending. Like it or not. Understand. Identify. Adapt. Overcome. Younger investors will read that and think, "well, no kidding." For those of us a little older, we have cut our teeth on learning how to get the information we need from balance sheets. For us, fundamental analysis has traditionally told us which way the bus was moving, while technical analysis told us where the bus stops were located.

See Jim Cramer on Mad Money on Thursday evening? See the interview with Microsoft (MSFT) CEO Satya Nadella? If there's a smarter dude on the planet, I'm not really sure. Maybe Jim himself. Maybe Peter Tchir -- but we're talking about an elite level here.

Well, to catch those of you up who missed it, Microsoft has pledged to not just clean up the firm's carbon footprint, but to become "carbon negative" by 2030. What? Microsoft will eliminate carbon emissions and invest $1 billion toward toward climate-based commitments. Carbon negativity is the reduction of the firm's footprint to less than neutral. In net, removing carbon dioxide from the atmosphere. Kind of like negative interest rates, except it's a good thing. By 2050, get this... Microsoft believes that it can eliminate all emissions that the firm has produced since 1975. The year of the Big Red Machine. That's a long time. The firm claims to have been carbon neutral since 2012. That's impressive in itself.

Hey,earlier this week, we heard from BlackRock (BLK) CEO Larry Fink, who runs a mere $7.43 billion in assets. He is telling you that climate considerations are a priority for future investment. The belief is that climate change is a factor in determining the longer-term prospects for corporate success. Do we need more than this?

Listen, I don't care whether or not you blame mankind for climate change. Regardless of fault, the world's leading asset manager believes this is an issue, and one of the world's leading tech CEOs believes this is an issue. The money is going to go where it is going to go, and who are we really on Wall Street, if we do not follow our mercenary little hearts, um I mean capital flows. Um, no, I mean what's now accepted as ethically correct. Yeah, that's the ticket.

Taiwan Semiconductor (AAPL) reported on Thursday morning. More important than the impressive earnings beat, was the guidance for the current quarter, as well as the expressed confidence regarding the ongoing roll-out of 5G technology. TSM's key customers include Apple (AAPL) , Advanced Micro Devices (TSM) , Nividia (NVDA) , Qualcomm (QCOM) , and Broadcom (AVGO) .

How about Kratos Defense (KTOS) ?... The firm announced on Thursday that it will participate in a multiple-award, indefinite-delivery/indefinite-quantity contract for U.S. Army advanced communications systems. Participating companies will compete for up to $5.1 billion in awards over a 10-year period as the U.S.Army seeks to rapidly develop technology to support networked battle command communications solutions. Ending in January 2030, this program will run with a five-year base period and five-year option.

08:30 - Housing Starts (Dec): Expecting 1.374M, Last 1.365M SAAR.

08:30 - Building Permits (Dec):Expecting 1.465M, Last 1.474M SAAR.

09:15 - Industrial Production (Dec): Expecting -0.1% m/m, Last 1.1% m/m.

09:15 - Capacity Utilization (Dec): Expecting 77.2%, Last 77.3%.

10:00 - U of M Consumer Sentiment (Jan-adv): Expecting 99.4, Last 99.3.

10:00 - JOLTs Job Openings (Nov): Last 7.267M.

13:00 - Baker Hughes Oil Rig Count (Weekly): Last 659.

09:00 - Speaker: Philadelphia Fed Pres. Patrick Harker.

12:45 - Speaker: Reserve Board Gov. Randal Quarles.

12:45 - Speaker: Reserve Board Gov. Michelle Bowman.

Before the Open: (FAST) (0.31), (KSU) (1.84), (RF) (0.39), (SLB) (0.37), (STT) (1.69)

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Bull Market, Treasury Notes and Green Investing: Market Recon - TheStreet

Bank of America (NYSE:BAC) reported a strong quarter to close out 2019. The top- and bottom-line results exceeded Wall Street expectations with revenue of $22.5 billion, $150 million higher than analyst projections, and EPS of $0.74 per share, which beat estimates by $0.06.

CEO Brian Moynihan noted that the results reflect "the strength of the U.S. consumer," which is evidenced by growth in spending activity among Bank of America customers -- up 5.9%, or $3 trillion, from 2018. Loan demand was also up during the quarter, a reflection of rising U.S. employment levels and growing wages. The U.S. economy continues to expand, and investors should consider this a key factor when investing in Bank of America.

Image source: Getty Images.

So if Bank of America reported solid earnings results and strong demand thanks to an expanding economy, why did the stock drop after earnings were released on Jan. 15? Lower interest rates were one reason, heavily affecting the company's revenue in the second half of 2019 and resulting in a 4% loss of profit year over year. As a result, management turned their focus to improving performance in loans and deposits, increasing attention to fee-generating businesses, and taking on additional risks. For example, The Wall Street Journal reported that the company's stock buybacks and share repurchases in 2019 helped improve EPS by $0.04 from a year earlier. This strategy allowed Bank of America to take advantage of its strong balance sheet to provide returns to shareholders.

BAC data by YCharts.

Considering all this, should Bank of America remain a long-term choice for investors?

Investors are right to be concerned about interest rate stability, which is necessary for Bank of America's business to flourish -- especially its loans. If interest rates spike, the company's margins will rise. All this depends on the Federal Reserve, which currently maintains a steady outlook, given low unemployment and modest economic growth. While there are no obvious catalysts that would change this, investors will want to remain cautious ahead of the looming election cycle. A change in political party might bring uncertainty about regulatory changes; Democrats in particular might want to limit the number of buybacks companies can make.

That said, investors should feel positive about Bank of America's long-term growth for 2020. Management remains confident that performance will be consistent with that shown in 2019, and they foresee solid loan growth in the current economic environment. In addition, management expects the credit card business to continue to grow, with a focus on the profitability of the new accounts.

Comparing Bank of America withother potential investments in the banking space, including JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS), shows that Bank of America's businesses go beyond trading and credit cards, with loan growth and digital banking particularly helpful in stabilizing the company over time. Its long-term advantages make Bank of America an attractive investment opportunity for 2020 and beyond.

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Investing in 2020: Should Investors Ride the Wave With Bank of America? - Motley Fool

Dana L. Wilson, founder of CHIP

Recent reports find that the racial wealth gap in America is widening. Research indicates that 40% of Americans dont have $400 for an emergency and 25% of Americans dont have any money saved for their retirement. For Blacks and Hispanics, the aftermath of a financial crisis could have more deleterious effects. Whites are more likely than Blacks and Hispanics to own a home and have other assets, which can be liquidated in the event of a financial emergency. For Black Americans in particular, the residual effects of slavery and discriminatory practices such as redlining, have made it more difficult to accumulate wealth. Dana L. Wilson is a New York City-based investment advisor who has worked on Wall Street and at firms like Merrill Lynch, State Farm and SunTrust Bank. With her over 10 years of industry experience, Dana has developed a unique understanding of the finance industry and the challenges that it faces. With these challenges in mind, Dana created CHIP. CHIP was developed with the purpose to ensure the visibility of financial professionals of color. Dana sat down with Forbes to discuss why she created CHIP, how she expects CHIP to transform diversity and inclusion in the industry and how the platform is unlike anything else on the market today.

Janice Gassam: Could you share with the readers a little bit about CHIP, what it is and how it works?

Dana Wilson: Sure. CHIP is an online platform and it stands for Changing How Individuals Prosperright now its a platform thats functioning as a database of Black and brown financial advisors and certified financial planners. So, really right now, were building out our professional database so were looking to get as many financial advisors and certified financial planners of color on the platform. Once we get to our goal number, we will release it to the public and theyll be able to go to our site, download the app, and really search for any advisor that theyre looking to work withtheyll be able to tell what city and state the person is located in, whether or not they are a fee-only advisor, which really just means that theyre only charging a set fee for their servicesitll show you a lot of information based on your needs and what you might be looking for as an individual. We also walk you through, on the app, what different titles mean because I think sometimes there might be a lot of confusionand a lack of understanding regarding what all the terminology is within the industry when it comes to different types of professionals.

Gassam: Why did you feel a platform like this was necessary?

Wilson: I felt that this was important, just based on my overall experience within the industry. Ive been in the financial industry for over 10 years nowover my time in the industry I feel like the same problems still exist when it comes to when it comes to the recruitment and retention of Black and brown professionals and the way that were serviced in the financial industryits really hard to be able to build out a business when you dont have the support, when you dont see people that look like you sitting in those seats, sitting in those senior management positionsit becomes even more difficult when youre trying to make your goals and deadlinesso for myself its been definitely a journey to sit in a place where Ive been the only woman of colorunfortunately in some situations Ive kind of gotten used to that and I felt that CHIP was extremely important not just for the industry as far as visibility but then also allowing the end user, if that person happens to be a person of color, letting them know that we are here and we do exist and I think that sometimes in corporate and even in the independent space that Im in, we dont see a lot of thatsometimes you dont necessarily find the person that might fit your needsor you might even be intimidated by the person that you start talking tosometimes being able to take those layers away and make people feel comfortable and know that there are people out there that look like youI know a lot of instances where people may feel like oh, I dont have enough money to work with an advisor, or Ive tried to do that before and they didnt really pay attention to me because I didnt have this large sum of money. CHIP is the place to say even if youre not necessarily ready, this is the place to know that you do have people to help and that are willing to educate youdeveloping this sense of visibility within the industry to kind of change a lot of whats broken in the financial system when it comes to ensuring that were [doing] a really good job to recruit and retain but then also creating really well designed, strategic and intentional shift of generational wealth when it comes to the communities that we want to serve.

Gassam: Is there anything like CHIP on the market already?

Wilson: Theres things similar to CHIP on the market, theres definitely other sites where you can go and search for advisorsbut CHIP is different in the fact that we dont just focus on independent advisors, we also focus on financial professionals in the more corporate, larger and institutional space and the reason being is that its sometimes hard for Black and brown professionals to get a seat at the tableits important that we showcase the fact that were able to be at the forefrontwere the only ones really focused on the corporate space as opposed to just independent and just fiduciary. Sometimes people dont even get to get on that side of being independent, which is just running your own practice and running your own businessbefore starting their career within the corporate space. Its important that we focus on both of those because the numbers are unfortunately low on both sidesif were only focusing on one particular segment, which is just independent advisors, were not helping the problem and the issue, so I think its important to focus on both.

Gassam: If I am a financial advisor and I identify as a person of color and I want to be on the website, what would the process be?

Wilson: Right now, its a very simple process. You can go to the websitethere are several different buttons that show advisors how to apply now, they can fill out a 2-3 minute questionnaire, that questionnaire gets filtered back towards us, and that automatically creates a profile on the appwe do our own quick background checkjust to make sure everyone on the platformis sticking our mission for CHIP.

Gassam: What do you envision the impact of CHIP being on the finance industry?

Wilson: So high-level, I really see CHIP being that bridge between the general public and professionals of color when it comes to the financial industry and really breaking down those wallsalso just bringing that visibility to helping people understand that you can do more and you can find success in this business. I think that anyone who has a desire to be in the financial industry, sometimes its tough when you dont necessarily see other people, you dont have the opportunity to network, you can become really siloed within your division or your corporate sector. But when you have that support system outside, it really makes a difference, especially when it comes to succession planning, when it comes to generational wealth, when it comes to the idea of hey, maybe I want to be able to sell my classes to someone who looks like me and were able to be very intentional about that. From a business perspective I see a lot of financial professionals able to really find revenue-generating opportunities from thisI think skys the limit. I think one of the biggest things within finance is just the education and not just the education but also understanding the industry and understanding the different types of players within the financial industryCHIP is the place to do that and also giving financial professionals a voice. I havent really seen a place where we really have a voice and were able to communicate our journeys, our thoughts, our ideas and talk to the people that need us the most. I really see CHIP having a huge shift in generational wealth and educationthis is a place where there are experienced, knowledgeable, professionals and theres a perfect place to be able to recruit, to share, to learn, to hear our stories.

Gassam: For someone reading this who doesnt really understand what a financial advisor is, could you share a little bit about the profile of a person who needs a financial advisor? There is a perception that you have to be...maybe making a certain amount and have a bunch of assets before you really need a financial advisor.

Wilson: Anyone who is really open and willing tothat perception and that myth really is not doing us justice[we think] its going to cost us a couple thousand to even sit down and have a consultationand thats really not the case. You can start out with what you have and if what you have is $25, $50 those are things that you can start out witheven if youre just working with someone and maybe theyre just helping you to save, thats a starting point in itself. A lot of advisors, they do more than just help their clients investwe work with our clients on budgeting, on cash flow managementeven if you feel like youreat the point where, I want to build up my emergency fund, thats finethere are people who are willing to work with you to help you do thatyou dont have to have a couple hundred to a couple thousand saved up. You dont have to have a large six-figure salary to sit down and talk to someoneit really is a lot about educationit doesnt matter how much money youre making, its about what youre educating them to do with it.

If youd like to learn more about CHIP, click here.

This interview has been lightly edited for brevity and clarity.

Authors note: The author has had a partnership with the interviewee in the past.

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How One Former Wall Street Investment Advisor Is Disrupting The Finance Industry With Her New Platform - Forbes

The final regulations are the culmination of a lengthy rulemaking process that kicked off in August 2018, when FIRRMA was enacted. As explained in our previous alert, FIRRMA represented the most sweeping overhaul of the operations and jurisdiction of CFIUS in its 45-year history. Likewise, the final regulations expand CFIUSs jurisdiction and introduce new levels of complexity and nuance that require extensive regulatory analysis for investors and US target companies alike. The final rules are divided into two separate regulations the first dealing with regular investments and the second dealing with just real estate transactions.

While a comprehensive treatise on the 327-page final CFIUS regulations will be of interest to many readers who have insomnia, we have instead chosen to highlight five areas and themes of the new CFIUS regulation covering regular investments. A separate alert will address the final regulations on real estate transactions.

With the final regulations, the Treasury Department essentially implemented a three-lane system for CFIUS reviews, just as Congress intended when it passed FIRRMA.

The regular lane will utilize CFIUSs traditional full-length filings, which are known as notices, and will need the full timeline for CFIUS review. However, this may feel like the slow lane to transaction parties in deals that are more complex or where CFIUS has questions because these types of reviews will still likely take several months.

For transactions filed using notices, the final regulations provide for an initial 45-day national security review, which includes a robust 20-day intelligence analysis by the US Intelligence Community, known as a National Security Threat Assessment (NSTA). The second stage, when needed, is a 45-day national security investigation with the option for CFIUS to grant itself a 15-day extension in extraordinary circumstances (such extensions are expected to be rare). The final stage is a 15-day window for the presidential determination. Therefore, where CFIUS seeks adverse action (by the President) against a transaction, the process for full filings can take 105 days, assuming no extraordinary circumstances would trigger an extension.

We summarize the types of transactions that require mandatory filings below, but it is worth noting that transactions of this nature may end up in the regular lane for reasons we will explain.

The fast lane is the streamlined process that Congress provided for in FIRRMA when it created short-form filings known as declarations. It will involve low-risk transactions, voluntary declarations, and an expedited, simplified intelligence assessment known as Basic Threat Information, which Congress authorized CFIUS to use at its discretion in lieu of the traditional, more robust NSTA.

For transactions submitted as declarations, CFIUS will have a 30-day review period. Declarations were introduced in FIRRMA, and either a declaration or a joint voluntary notice (JVN) may be used to satisfy a mandatory declaration requirement. Declarations will be short in length (about five pages) and submitted on a standard fillable form. Under FIRRMA, CFIUS may respond to declarations in several ways and is not required to make a final determination on the basis of a declaration.

This lane leads to a convenient exit ramp from the CFIUS process. It is available to excepted investors that meet a very narrow definition under the new CFIUS regulations. Of course, a central part of that definition involves excepted foreign states. The Treasury Department has selected Australia, Canada, and the United Kingdom as the initial excepted foreign states. The determination of which countries will qualify in the future as an excepted foreign state is based on a determination by CFIUS that the country has in place an effective, robust process for screening foreign investments for national security risks and coordinating with the United States on related matters. The three initial excepted foreign states are all members of the so-called Five Eyes intelligence partners and have a demonstrated history of cooperation and coordination with the United States on national security matters.

Excepted investors are low-risk foreign persons who will be exempt from CFIUS reviews for non-passive, non-controlling minority-investments and real estate transactions (but not for control transactions). The concept of excepted investors will be based on not just the foreign persons connections to an excepted foreign state, but also the foreign persons compliance with certain US laws, regulations, and other rules.

An investor interested in qualifying as an excepted investor must self-classify as one, based on its own determination that it meets the criteria set out in the final regulations. In order to be an excepted investor, the investor must meet one of the following definitions:

The excepted investor concept will result in two de-facto tiers of foreign investors: those who are seen as inherently low-risk and meet the criteria, and everyone else. However, the definition of excepted investor is quite narrow, reflecting CFIUSs concern over the growing complexity of ownership structures and its desire to prevent the circumvention of its jurisdiction (which was also a primary motivation of the US Senators who originally authored FIRRMA).

The final regulations implement FIRRMAs provisions on mandatory and voluntary filings, which were among the laws more significant changes to the CFIUS process. Stakeholders should be aware that, although we summarize the filing requirements below, the final CFIUS regulations are complex, and this summary is not intended to capture all of the requirements of the final rules comprehensively. Experienced CFIUS counsel should analyze whether a certain transaction requires a filing.

Transaction parties will be required to file a mandatory declaration (or notice) for certain transactions:

As explained below, the Treasury Department incorporated the key elements of the 2018 critical technologies pilot program into the final regulations. If a transaction could result either in foreign control of a US business that produces, designs, tests, manufactures, fabricates, or develops a critical technology that is used in one of 27 sensitive industries (listed in an appendix to the regulations), or it constitutes a non-passive, non-controlling minority investment in such a US business, then the transaction parties must submit a mandatory filing.

The final CFIUS regulations do not contain an actual list of the critical technologies, because the universe of critical technologies is dictated by the lists of export-controlled technologies overseen by the Commerce and State Departments, and export controls are not static. Further, the Export Control Reform Act of 2018 (ECRA), which was enacted alongside FIRRMA as sidecar legislation, requires Commerce to examine and control emerging and foundational technologies that are essential to US national security, but neither of these categories have been fleshed out yet. Anything added by Commerce under that framework will also become a critical technology for CFIUS purposes, so stakeholders would be well-advised to monitor the potential expansion of export controls for emerging and foundational technologies.

Although the filing of a declaration will satisfy transaction parties mandatory filing obligation, in some instances (e.g., transactions involving a critical technology that the US Government considers especially sensitive), it may be advisable and ultimately more efficient to file a joint voluntary notice (JVN) instead of a declaration. Stakeholders will want a final determination from CFIUS (i.e., safe harbor from CFIUS taking adverse action in the future against a transaction that never underwent CFIUS review) yet, under the final regulations, they are only entitled to an up or down decision from CFIUS if they file a JVN. The filing of a declaration does not obligate CFIUS to make an actual decision regarding a transaction, which can be a source of frustration, delay, and expense for transaction parties.

Mandatory declarations must be submitted 30 days before the completion date of the transaction (for deals completed after March 14, 2020).

CFIUS remains a largely voluntary process under the updated statute and regulations. The final regulations give substance to FIRRMAs tight focus on critical technologies, critical infrastructure, and the sensitive personal data of US citizens. TID businesses are not subject to mandatory filing requirements unless the transaction meets the criteria laid out above. Rather, transaction parties can voluntarily file a declaration or JVN depending on the nature of the transaction.

As explained in our previous alert, non-passive, non-controlling minority investments in TID US businesses will typically be venture capital and other private equity investments through which a foreign person could obtain certain types of governance or information rights in the TID US business, including board membership or observer status (or the right to nominate someone to the board); access to the businesses material nonpublic technical information; or involvement in the companys substantive decision making on critical technology, critical infrastructure, or sensitive personal data (other than through shareholder voting).

As noted, per FIRRMA and the new CFIUS regulations, critical technologies are comprised of not only items on the US Munitions List (USML) and certain items on the Commerce Control List (CCL), but also emerging and foundational technologies identified and controlled pursuant to ECRA.

Progress on new controls on emerging and foundational technologies has been slow. On January 6, 2020, Commerce issued an interim final rule adding software specially designed to automate the analysis of geospatial imagery to the Commerce Control List, restricting its export to all countries except Canada. Consequently, as explained in our alert discussing the implications of the interim rule, this software is now a critical technology under CFIUS regulations, and companies that produce, design, test, manufacture, fabricate, or develop such software may have to submit a CFIUS filing. Before that development, Commerces last action had been in November 2018, when it issued an Advanced Notice of Proposed Rulemaking (ANPRM) asking for public input on identifying emerging technologies. Moving forward, we expect that Commerce will issue controls on additional emerging technologies, as well as an ANPRM on foundational technologies to gather public and industry input.

In terms of how the CFIUS rules apply here, companies that produce, design, test, manufacture, fabricate, or develop critical technology may trigger a mandatory filing requirement or decide to do a voluntary filing for several reasons discussed below. Additionally, it is critical to note that companies that use a critical technology but do not engage in any of the above-listed activities will not be caught by the CFIUS regulations pertaining to non-passive, non-controlling minority investments involving critical technology. That being said, the activities that may trigger CFIUS jurisdiction producing, designing, testing, fabricating, and developing are not defined in the CFIUS regulations.

Ultimately, for US companies and investors, any new export controls on emerging and foundational technologies may result in CFIUS asserting jurisdiction for transactions not previously required to undergo CFIUS review. Further, because the imposition of export controls on emerging and foundational is an ongoing process, both companies and investors should be on the lookout for changes.

In the final regulations, the Treasury Department incorporated the separate critical technologies pilot program it had implemented for non-controlling and controlling investments involving critical technology into the CFIUS regulations. If the transaction could result in foreign control of a US business that produces, designs, tests, manufactures, fabricates, or develops critical technologies used in one of the industries the Treasury Department has listed in an appendix, then a mandatory filing will be required.

For now, the Treasury Department will continue to use the same North American Industry Classification System (NAICS) codes that it used in the pilot program, enumerating 27 sensitive industries that will be covered by the mandatory filing requirement for critical technology. However, in the final regulations, the Treasury Department announced that it will issue a future notice of proposed rulemaking on this, departing from this industry-based approach for mandatory filing requirements. CFIUS will instead use export control licensing requirements to determine whether a critical technology transaction belongs to an industry that will be subject to mandatory filing requirements.

While it is unclear what the Treasury Department means by export control licensing requirements, it is possible that the Treasury Department will link mandatory filing for critical technology transactions to whether the technology at issue would require an export license if exported, reexported, transferred, or released to the country of the foreign investor. The Treasury Department will likely issue interim rules on this issue before February 13, 2020, creating additional anticipation for stakeholders.

Non-passive, non-controlling minority investments in US companies that produce, design, test, manufacture, fabricate, or develop one or more critical technologies are now under CFIUS jurisdiction. However, if the investment (1) does not meet the criteria of the mandatory critical technology filings and (2) the foreign acquirer is not a foreign government, then notification of the transaction is purely voluntary and should be based on an evaluation of whether CFIUS might have concerns about the transactions national security risks. Experienced CFIUS counsel can assist with such an evaluation and advise on whether a filing would be prudent.

The final regulations expand CFIUSs jurisdiction to include certain non-passive, non-controlling minority investments by a foreign person in a US company that owns, operates, manufactures, supplies, or services critical infrastructure. Treasury enumerated the specific critical infrastructure that can trigger this new area of CFIUS jurisdiction, listing 28 specific types of systems and assets within various infrastructure subsectors, such as telecommunications, utilities, energy, transportation, and manufacturing.

The final regulations implement CFIUSs jurisdiction over 11 specific categories of sensitive personal data, including financial, geolocation, health, biometric, and security clearance data, as well as electronic communications such as emails, text messages, and chat. These constitute sensitive personal data only if the US company:

In the final regulations, Treasury Department also narrowed the scope of genetic information that would have been subject to CFIUS jurisdiction (under its original proposed draft regulations) to only results of an individuals genetic tests whenever such results constitute identifiable data. Genetic tests is defined in reference to the Genetic Information Non-Discrimination Act of 2008 (42 U.S.C. 300gg-91(d)(17)). So, genetic testing data covered by CFIUS will not include genetic testing data derived from databases maintained by the US Government and routinely provided to private parties for research.

The final regulations also provide a special clarification for limited partners (LPs) who are foreign persons, have passive investments in a TID US business through an investment fund, and serve on that funds special advisory board or committee. This provision is derived from a very specific section of FIRRMA. Under the final rule, an investment can avoid being swept up by CFIUS jurisdiction if a series of specific criteria are met, such as the fund being managed by a general partner who is not a foreign person, the advisory board lacking the ability to impact investment decisions, and the passive foreign LPs lacking the ability to control the fund.

CFIUS will apply this exemption narrowly only to truly passive investors, and therefore it is in the best interests of investment funds to ensure that any foreign LPs do not have an active role in the management of the fund. As a result, stakeholders should clearly define roles for foreign LPs to avoid the entire fund being classified as a foreign person for CFIUS purposes.

Lastly, in the final regulations, the Treasury Department defined a new term, principal place of business, which has been a longtime element of the definition of foreign entity. Treasury is now seeking comments on the definition of principal place of business, which are due February 17, 2020. The final regulations define foreign entity as any entity organized under the laws of a foreign state if either its place of business is outside the United States or its equity securities are primarily traded on one or more foreign exchanges. The final regulations define principal place of business as the primary location where an entitys management directs, controls, or coordinates the entitys activities, or in the case of an investment fund, where the funds activities and investments are primarily directed, controlled, or coordinated by or on behalf of the general partners, managing member, or equivalent.

The impact of this new term may be that some investors who previously could have been categorized as a foreign entity will now be off the hook, under certain circumstances. Stakeholders should be aware that the final regulations tie the principal place of business of an entity to the most recent submission or filing to the US government or any foreign government.

Read more:
CFIUS 2.0: Treasury Unveils Final Regulations to Govern Expanded Foreign Investment Screening - JD Supra

HOLLAND, MI Pharmaceutical company Perrigo is building a 66,000 square foot warehouse expansion at its Holland Township campus, an investment valued at $13.6 million.

The project was announced Friday by Lakeshore Advantage, an economic development organization that assists employers with growth opportunities in Ottawa and Allegan counties.

Perrigo, the store-brand pharmaceutical maker that was founded in Allegan but is now headquartered in Dublin, says construction started in April and is expected to be completed by May. As part of the project, the company received a 12-year industrial facilities tax exemption from Holland Township. The exemption cuts the buildings property tax bill in half.

Sarah Barwacz, a spokesperson for Perrigo, said the expansion is needed to accommodate high product demand in the Holland production facility which manufactures some of our consumer over-the-counter products.

Lakeshore Advantage officials say theyre pleased Perrigo is investing in its Holland Township campus.

Perrigos investment is a testament to the strength and ingenuity of our regions manufacturing workforce, Jennifer Owens, President of Lakeshore Advantage, said in a statement. We are grateful to have this significant investment by global business leader and outstanding employer, Perrigo, in West Michigan.

Barwacz said the project will result in job growth. But as of now, company officials do not have projections for how many positions will be created, she said.

Perrigo employs more than 3,000 people in West Michigan.

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Read more:
Perrigo investing $13.6M in warehouse expansion - MLive.com

Investing can seem intimidating when you see experts advising workers to put away $100,000 by 35 or aim for over $1 million by retirement. But you don't need a ton of money to buy into the stock market. In some cases, you can get started with as little as $1.

Stocks and exchange-traded funds can only be bought in whole units at many brokers. Depending on the company or fund, that could mean thousands of dollars for a single share. But some financial companies are changing those requirements. Now, firms including Charles Schwab, Robinhood, Square, SoFi and Stash all allow investors to buy fractional shares of individual stocks and, in some cases, ETFs, for $1 or more.

"This is a start in the right direction," Ryan J. Marshall, a New Jersey-based certified financial planner, tells CNBC Make It. "Allowing for fractional shares of ETFs will open up the market for more investors."

If that sounds enticing, here's what to keep in mind.

It's certainly positive that investing is getting cheaper on the whole for the average investor. But if you're a novice, you're going to want to stick to buying low-cost funds that track an index like the S&P 500, rather than picking and choosing individual companies to invest in.

"If you can only afford fractional shares of a stock, then you probably shouldn't purchase the stock in the first place," says Marshall.

These funds have relatively cheap fees and give you exposure to broad swaths of the stock market, which are key factors in building wealth. Stock picking by itself is a losing game no matter how much research you put in, you're probably not going to beat the market, and studies indicates time and again that passively managed funds perform better than actively managed funds.

"In today's environment, most people are running around worried about their careers, their family, what time soccer practice is on Tuesday and simply don't have the time to monitor and research individual stocks," says Marshall. "Either leave it up to mutual funds managers to make those calls or own the market in an index fund. Both provide great diversification and lower entries costs."

Buying fractional shares has always been possible when buying mutual funds, according to a spokesperson from Fidelity; it's essentially what investors do when buying into funds through a 401(k). Now, the ability to buy fractional shares is expanding to ETFs and stocks too, which you'd typically buy through a taxable brokerage account.

"The individual investor is better suited by investing in mutual funds and exchange-traded funds," Greg McBride, chief financial analyst at Bankrate, told CNBC Make It. "But the lure of individual stocks is always there. On some level, so is the belief that doing so enables the investor to beat the market, which has proven not to be true."

That said, if you're already contributing a healthy amount to a retirement investment account like a 401(k) or IRA but want to dip your toe into individual stock trading, buying fractional shares can be a good starting point.

This way, you can invest in expensive companies like Amazon or Alphabet without the near-$2,000 necessary to buy a single share (Amazon was trading for close to $1,900 on Friday; Alphabet was at just over $1,400). It's also an effective way for to test out a company before committing a large amount of money.

Again, it shouldn't be your sole investing strategy, but if you want to build on your retirement accounts, it's a good entry point. CNBC's Jim Cramer says the first $10,000 you invest should go to a low-cost index fund or exchange-traded fund that mirrors the S&P 500.

After that, you can start researching individual companies to invest in if that's part of your overall financial plan and you have the time and resources to do so.

Don't miss: Robinhood will let users invest with as little as $1here's what that means for you

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Original post:
How to get started investing with as little as $1 - CNBC

Microsoft plans to establish a $1 billion fund dedicated to carbon reduction, capture, and removal technologies, amid a broader commitment to clean up the software giants emissions across its corporate history by 2050.

Its one of the largest funding commitments ever to methods of sucking carbon dioxide out of the air, which most research shows will be a necessary part of any plan to prevent catastrophic levels of global warming. Funding for direct-air-capture startups like Carbon Engineering, Climeworks, and Global Thermostat have been climbingbut have been limited to the tens of millions of dollars range to date.

In a statement to MIT Technology Review, Microsoft stresses the money will go to more than direct air capture, adding that it will fund the build-out of projects as well as research and development. The money will be invested over the next four years.

The companys language leaves room for many other possible investment areas, including natural systems for removing and storing carbon dioxide, such as forestry projects, or technologies that prevent it from escaping power plants in the first place. For that matter, the phrase carbon reduction in the announcement means some of the funds could simply go to solar, wind, and other renewables projects as well.

Courtesy: Microsoft

Microsoft didnt specify its total historic emissions, but said its operations will pump out 16 million metric tons of carbon dioxide this year, directly or indirectly. The company says it will offset its climate pollution stretching back to 1975 through a combination of direct air capture and natural systemsincluding tree plantings, new soil management practices, and a largely theoretical approach known as bioenergy with carbon capture and storage.

Experts say that natural systems can play a big role in drawing down greenhouse gases, but its notoriously difficult to account for them in an accurate and reliable way.

Noah Deich, executive director of Carbon180, and other observers says Microsofts announcement on Thursday goes well beyond the standard carbon neutrality commitments of other major corporations, because it incorporates historic emissions, sets specific benchmarks for reductions, and puts a large amount of money behind the efforts.

Link:
Microsoft will invest $1 billion into carbon reduction and removal technologies - MIT Technology Review

Jan 14, 2020 at 19:00 UTCUpdated Jan 14, 2020 at 19:56 UTC

Matt Hougan image from CoinDesk archives

More than half of financial advisors in the U.S. are too spooked by regulatory uncertainty to initiate or expand their cryptocurrency investments, a new study by Bitwise Asset Management found.

The annual survey, released Tuesday, asked 415 advisors a range of questions on their crypto sentiments, including where they think the market is going, how their clients approach crypto and what it would take for them to invest more in the space. Bitwise found advisors are increasingly bullish on bitcoins future but hesitant to invest in it for their clients or themselves.

Bitwise conducted the survey in December.

Only 6 percent of respondents currently invest clients' funds in crypto assets, and the holdouts largely plan to continue avoiding crypto in 2020; 55 percent said they will probably or definitely not invest in crypto this year, while only 7 percent said they probably or definitely will.

The survey found a notable slice of fence-sitters, too: 38 percent are unsure what theyll do this year, which is significant, said Matt Hougan, Bitwises global head of research, who conducted the survey.

Advisors are intrigued by cryptos proven history of delivering uncorrelated returns or high returns, Hougan said. However, many continue to balk at investing, largely because of regulatory uncertainty and questions of access.

Fifty-six percent of respondents said regulatory concerns are preventing them from embracing crypto assets. This is despite what Bitwise describes as significant progress in the crypto regulatory space in 2019, including action by New Yorks Department of Financial Services and steps toward a regulated bitcoin exchange-traded fund.

Respondents are looking at the regulatory landscape. According to the 2019 figures, 42 percent indicated regulation was their top concern, while, looking ahead, this year a majority, or 58 percent, said better regulation could spur them to invest.

Hougan said even small increases in investors crypto allocations could be a boon for the market overall. He said advisors control $24 trillion in assets, dwarfing bitcoins current market cap of about $160 billion.

Crypto people are over-focused on institutions as the next wave of adopters and under-focused on advisors, who control just as much as the institutions, he said.

The survey finds advisors increasingly think bitcoin is on the rise. Sixty-four percent project it will add value by 2025, while 8 percent think the market will crash by years end.

Their clients, too, seem to show notable interest in cryptos future and sometimes outside of their relationships with the fiduciary; 35 percent of advisors believe that some of their clients are investing in crypto themselves. A far larger slice of the advisors 76 percent said they fielded clients crypto questions in the past year.

Hougan said advisors attitudes towards the market made strides through 2019; compared to the nadir of December 2018, when bitcoins price made historic lows, advisors are more positive this year.

Last year people were not sure if crypto would survive. Now people are more confident, he said.

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Read the original here:
More Than Half of Financial Advisors Want Better Regulation Before Investing in Crypto - CoinDesk

Yet stocks remain near all-time highs. It's not necessarily the wisest time to take your money out of the market.

Fortunately, there are several so-called minimum or low volatility exchange-traded funds from such respected money management firms as Fidelity, BlackRock, Invesco and others of their ilk.

These and many other low and minimum volatility ETFs offer investors a mix of value stocks that have some of the characteristics of safer bonds, said Troy Gayeski, co-chief investment officer at SkyBridge. They should benefit from a flight to safety.

Financial stocks are another group that may benefit from low volatility. Banks have outperformed the broader market in four out of five recent periods of low volatility, according to KBW analyst Fred Cannon.

As a result, Gayeski said investors could be missing out on bigger gains by shunning riskier parts of the stock market, such as tech, in favor of stodgy, dependable dividend payers.

The US-China trade agreement, due to be signed this week, could keep the broader market rally going for some time. That means that now may not be the right time to adopt a more prudent, risk-averse strategy.

"It's too early to be defensive. The 'phase one' China deal may not be a Kumbaya-let's-hug-each-other moment, but it stops things from escalating further," Gayeski said.

Others argue that the market won't remain this sanguine indefinitely.

"Low volatility can't last forever," KBW's Cannon wrote in a report last Friday.

To that end, adding more consumer companies, health care stocks, real estate firms, utilities and financial services companies to your portfolio could make sense.

Dividend yields should become an increasingly important generator of market returns if things suddenly become more noisy.

"I understand why people are anxious. We are getting late in this economic cycle. People are opting for some good old-fashioned dividend players," said John Norris, managing director of wealth and investments for Oakworth Capital Bank.

Norris told CNN Business he's "astonished" by how quickly Iran has vanished from the financial news headlines. But he added there are still question marks about the health of earnings, the Federal Reserve's rate policy and a potential economic slowdown.

"You should see more normal levels of volatility this year," Norris said.

With that in mind, it may make sense for investors to favor blue chip stocks in more stable sectors, says Quincy Krosby, chief market strategist with Prudential Financial.

Krosby argues that there is still uncertainty about what will happen with the United States and China even after a preliminary trade deal is signed.

She added that CEOs and CFOs may hold off on some key business decisions until the outcome of the presidential election becomes clearer. A more progressive Democratic candidate could spell trouble for the health care, retail and tech sectors.

"Is there an all clear signal for the broader market? No. You're going to have to take things quarter by quarter," Krosby said. "That's why it will be important to focus on quality companies with strong cash flows and steady dividends."

Originally posted here:
How to stay invested if you're a worrier - CNN

Don't fall for "cheap" stocks. Buy these companies instead.

Motley Fool Staff

Jan 16, 2020 at 3:15PM

New investors are often drawn to penny stocks -- they're small companies with "potentially huge growth opportunities" and they trade for only a couple of dollars (or cents) so it seems easy to scoop up a bunch of shares even if you don't have a lot of cash.

They sound like the perfect way to start investing, but they're actually the exact opposite!

In this video from our YouTube channel, our team explains why these seemingly "cheap" stocks can actually burn your hard-earned cash and how investors with only $20 can get started investing the right way.

To get our free investing starter kit mentioned in the video, head over to Fool.com/Start!

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Originally posted here:
Forget Penny Stocks -- Here's the Best Way to Invest $20 - The Motley Fool