Author Archives: Scalper1

Wall Street Banks Declare War On Silicon Valley Mobile Payments

Wall Street banks have declared war on Silicon Valley mobile payments platforms, arming to do battle in the peer-to-peer mobile payments business. As the likes of Square ( SQ ), Facebook ( FB ) and PayPal ( PYPL ) have charged into the uncharted waters of peer-to-peer payments, Wall Street banks have spent five years stitching together an alliance among JPMorgan Chase ( JPM ), Bank of America ( BAC ), Wells Fargo ( WFC ) and U.S. Bancorp ( USB ) and others, according to a press release from Early Warning. Early Warning is a real-time payments and authentication firm that will manage clearXchange, a technology that lets bank customers make quick — near-instant — transactions. It now generally takes one to three days to transfer money between banks. Banks had been slow to innovate after the financial crisis, but now “what we are doing now is delivering payments in real time, which is what our customers have asked for,” Mary Harman, managing director for payments at Bank of America, said in an interview with Reuters . The banks are starting to use clearXchange to allow customers to transfer money almost instantly to friends and family. Peer-to-peer payments have been popular among millennials for splitting dinner bills, cab fare and paying rent. Achieving a critical mass fast is important for the banks using clearXchange. The so-called network effects — the value unlocked from having a large customer base — were critical to PayPal’s early success in online payments, for example. PayPal was early to the peer-to-peer market and snapped up the popular Venmo app as a part of its $800 million Braintree acquisition in 2013. Braintree had acquired Venmo in 2012. Last year, Venmo moved $7.5 billion between people, and in January alone it handled $1 billion, PayPal told Reuters. As of Wednesday, only customers at U.S. Bancorp and Bank of America will be able to send money via mobile devices with the clearXchange platform. JPMorgan and Capital One Financial ( COF ) told Reuters they plan to plug in to the platform “later this year.” Citigroup ( C ) is among banks that have not joined the alliance, Reuters said. PayPal stock was up a fraction, near 38, in afternoon trading on the stock market today . The company is an IBD Leaderboard stock. Shares are just below an early entry at 38.62. A conventional buy point lies at 42.65. Square stock was down a fraction Wednesday afternoon, as the company was set to report its Q4 earnings after the close . Investors are likely going to focus on Square Capital, the company’s financial services arm, as an area of growth. Square’s peer-to-peer payments app Square Cash recently added a feature that let customers store money in it, much like a PayPal account already does. Facebook built its peer-to-peer payments play within its Messenger app , and it did so in-house. The company has said Messenger has more than 800 million customers. Facebook stock was up 1% Wednesday afternoon, near 107.

Microsoft Corp.'s HoloLens Inches Closer to Store Shelves

Image courtesy of Microsoft The hype surrounding virtual reality and, by extension, augmented reality (AR) hit fever pitch when Facebook owned Oculus announced in January

The Best And Worst Of February: Managed Futures

Managed futures mutual funds and ETFs had a strong month in February, with the average fund in the group returning +1.77% while the S&P 500 Index dropped 0.13% and the Barclays US Aggregate Bond Index gained 0.71%. Most funds generated positive returns for the month, and the top three funds gained between 3.67% and 6.34%, while only two funds in the entire category lost more than 0.88% in February. Top Performers in February The three best-performing managed futures mutual funds in February were: The PIMCO TRENDS fund was the category’s top performer in February, gaining an impressive 6.34%. Unfortunately, the fund – which debuted on the last day of 2013 – was still down for the year ending February 29, with one-year returns of -2.93% ranking it in the bottom 37% of its category. The fund’s one-year beta, relative to the Credit Suisse Managed Futures Liquid Index, of 0.60 was roughly in line with the category average of 0.66, while its one-year alpha of -4.27% compared unfavorably with the category average of -2.60%. PQTAX’s one-year Sharpe ratio through February 29 was -0.23, compared to -0.01 for the category as a whole. The SFG Futures Strategy Fund ranked second among managed futures mutual funds and ETFs in terms of February performance, with monthly gains of 3.92%. But like the PIMCO TRENDS fund, SFG’s Futures Strategy underperformed for the year ending February 29, returning -3.93% and ranking in the bottom third of the category. Its one-year beta and alpha stood at 0.75 and -6.38%, respectively, giving it a Sharpe ratio of -0.37. Of February’s top-three performers, the Altegris Managed Futures Strategy looked best beyond the past month’s performance. Its February gains of 3.67% contributed to its one-year return of +4.75% through February 29, ranking in the top 20% of the category. The fund, which debuted in August 2010, had three-year annualized returns of +3.71%. Its one-year beta of 0.81 indicates a relatively high correlation with the Credit Suisse index, but its alpha of 2.21% and Sharpe ratio of 0.48 highlight its outperformance. Worst Performers in February The three worst-performing managed futures mutual funds in February were: Dunham’s Alternative Strategy Fund was February’s worst performer in the managed futures category, returning a dismal -3.25%. DNASX’s underperformance has been enduring, as its -11.92% one-year returns through February 29 ranked in the bottom 8% of the category. Its one-year beta of -0.20 indicates it has very low (modestly inverse) correlation to the Credit Suisse index, but this favorable feature is overshadowed by the fund’s -11.26% one-year alpha. Its one-year Sharpe ratio, a measure of risk-adjusted returns, stood at an abysmal -2.29. The First Trust Morningstar Managed Futures Strategy ETF was the only exchange-traded fund among the top or bottom three for February. It returned -1.22% for February and -3.97% for the year ending February 29. The fund had a beta of 0.39, alpha of -4.64%, and a one-year Sharpe ratio of -0.61. Finally, the Discretionary Managed Futures Strategy Fund was February’s third-worst performer in the category, returning -0.88% for the month. The fund’s one-year return of -1.90% ranked in the bottom 46% of funds in its category, and its beta of 0.03 ranked among the lowest in the category. The fund’s one-year alpha was -2.09%, indicating that it underperformed the index even as it remained mostly uncorrelated with it. In risk-adjusted terms, FUTEX’s returns resulted in a one-year Sharpe ratio of -1.09. Note : Alpha and Beta statistics are relative to the Credit Suisse Managed Futures Liquid Index. Past performance does not necessarily predict future results. The Jason Seagraves contributed to this article.