Social Media and Mobile Continue to Grow China’s E-Commerce Market to Over $190b

“China’s e-commerce market racked up a whopping 1.3 trillion RMB ($190 billion USD) worth of transactions in 2012, according to a report by the China Internet Network Information Center (CNNIC) (linked article is in Chinese), an increase of 66.5 percent over 2011′s total.

Last year, 242 million Internet users purchased goods online, and e-commerce transactions accounted for 6.1 percent of total retail sales of consumer goods.

The growth was driven in large part by mobile users: during the last half of 2012, 40.7 percent of online shoppers used a mobile device to browse e-commerce merchandise. More than half–53.6 percent–browsed a merchandiser’s mobile app instead of accessing its main Web site through their device’s Internet browser. 53.3 percent of the respondents who used their mobile devices to shop said they did so while at home, and many stated that their smartphones had begun to replace their home PCs. 26.2 percent said they browsed items on their smartphones while at work or school, and 10.6 percent said they spent their commutes or time waiting in queues to shop.

In addition to mobile, social media platforms also drove e-commerce sales. 41.8 percent of shoppers said they had first seen information or promotions for a product on a social media site before deciding to purchase it…..”

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“Amazon today took a big step forward in its strategy to take its app distribution business — and its Kindle Fire hardware business — global: it announced that its Android-based Appstore will expand to cover “nearly 200″ countries, including adding Australia, Latin American countries like Brazil and Mexico, Canada, South Africa and South Korea. Up to now, the only countries where the Appstore was available were the U.S., UK, Germany, France, Italy, Spain and Japan.

Developers interested in distributing their apps to these new international users can start submitting their apps today, Amazon said. The storefronts themselves will be coming “in the coming months” when Amazon officially launches its Amazon Appstore for Android internationally.

Last quarter, Amazon missed on almost all analyst estimates but its stock soared anyway, partly because, as the WSJ points out, it was showing improvements in its operating income — a sign that its business of selling online on a grand scale continues to progress.

Amazon is due to announce its next quarterly results on April 25. Putting the news out today that it’s growing the scale of its digital content business even further helps them continue to sell that message in the lead-up to that.

It’s also an important message to lure more developers to its platform.

“Amazon’s platform is a complete end-to-end solution for developers wanting to build, market and monetize their apps and games on Kindle Fire and Android devices,” said Mike George, VP of Apps and Games at Amazon, in a statement. “Allowing developers to target distribution of their apps and games in even more international countries is yet another important milestone as we strive to serve consumers and developers globally. Many of our existing developers have localized their apps and games for international consumers, and we look forward to working with new developers that have been waiting to bring their apps to more Amazon customers across the globe.”

Amazon, as we have all come to expect by now, doesn’t give out specific numbers on how well apps (or its devices) are selling. (However, Flurry a year ago estimated that the Appstore generated nearly as much as Apple’s App Store, at 89% of Apple’s app revenues, with Google Play significantly behind them, making only 23% as much as Apple…..”

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“Microsoft just scored a coup on the patent royalty front, with a new deal with Taiwanese phone maker, Hon Hai, which owns Foxconn.

Under the terms of the deal, Microsoft will get paid a flat fee per Android and Chrome-based device that Foxconn makes. And there are a lot of those. A whopping 40 percent of the world’s phones come from the firm’s China-based factories. Foxconn is an ODM, or “original design manufacturer”, and makes Android devices for clients like Acer and Amazon (it makes the Kindle Fire).

It’s famous for making iPhones and iPads as well.

The exact patents licensed were not revealed, but Microsoft has been famously litigious on the patent scene. With regard to the Android OS, legal documents filed in 2010 against Motorola and against Barnes & Noble in 2011 give some clues.

One of its patent claims is against a way that long and short file names are implemented, and is linked to the FAT16 file system used by older Microsoft OSes like MS-DOS and Windows.

Other patents include data management, across flash drives and another in contact databases. Microsoft’s user interface patents are also involved.

Microsoft said that over 50 percent of the world’s Android phones come from manufacturers that already have patent agreements in place with it…..”

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“The stock market, which hit record peaks earlier in April, will end the year higher, says Larry Fink, CEO of BlackRock, the world’s biggest money manager.

Positive fundamentals will dictate the move, he tells CNBC. About 85 percent of the companies that have reported first-quarter earnings have topped analysts’ estimates, he says.

“It’s an indication of a stronger economy. It’s an indication of corporations managing their expenses properly. It does validate my long-term view.”

BlackRock enjoyed a record inflow of $33.7 billion into its stock funds during the first quarter. “What we’ve seen from the beginning of the year is that clients are putting cash to work,” Fink explains.

“Most of that money came from cash. We didn’t see a rotation from bonds to equities. We saw a persistent demand for equities.” And Fink thinks that demand will continue….”

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“Investors are dumping gold funds at the fastest pace in two years in favor of equities, compounding a slump that has wiped $560 billion from the value of central bank reserves.

Exchange-traded products linked to gold dropped $37.2 billion in 2013 as the metal reached a two-year low Tuesday. Gold funds suffered net outflows of $11.2 billion this year through April 10, the most since 2011, while global and U.S. equity funds had net inflows of $21.25 billion, according to Cambridge, Massachusetts-based EPFR Global.

Central banks are among the biggest losers because they own 31,694.8 metric tons, or 19 percent of all the gold mined, according to the World Gold Council in London. After rallying for 12 straight years, the metal has tumbled 29 percent from its September 2011 record of $1,923.70 an ounce. Growing economies and corporate profits, along with slowing inflation, boosted global equities by $2.28 trillion this year at the expense of the traditional store of value, according to data compiled by Bloomberg.

“There’s a perception that risk has been lessened, and with that, investors are looking for assets that either generate income or have growth potential, neither of which gold has,” Anthony Valeri, a market strategist with LPL Financial Corp. in San Diego, which oversees $350 billion. “We’ve seen a grab for yield, and without a yield, gold has been left out.”

Bear Market…”

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“The Federal Reserve and the world’s other central banks — not fundamentals — are boosting asset prices, says Mohamed El-Erian, CEO of giant money manager Pimco.

“Investors should recognize that in virtually every single market segment, we are trading at very artificial levels,” El-Erian told WSJ.com. “It’s true for bonds, it’s true for equities. . . . If these levels aren’t validated by the fundamentals, then investors will get hurt.”

In the United States, the stock market hit record highs again last week, and bond yields are near record lows.

The Fed has added more than $2 trillion to its balance sheet through quantitative easing (QE) over the past five years. And it plans to keep the federal funds rate target at zero to 0.25 percent until unemployment shrinks to 6.5 percent from 7.6 percent in March. Other central banks also are in stimulative mode, with the latest entrant the Bank of Japan….”

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“Richard Bernstein’s latest research piece has a view that I very much agree with.  The Fed is traditionally a reactive entity.  When the economy is running hot they tend to lag the market and tighten too late.  When the economy is running cold they show up late to the party as they did in 2008.  On both sides they end up playing catch-up which results in whip-sawing the economy in a way that actually causes more economic volatility than necessary.

Richard Bernstein expects this cycle to end the same way.  He says:

“The Fed believes that reversing QE will slow the economy. However, a steeping yield curve and stronger business confidence argue otherwise. If we are correct, then the Fed could once again be forced to play catch-up to the markets during the mid- and late-cycle.As most cycles mature, the Fed typically realizes that their policies have been too accommodative for the maturity of the cycle. Production bottlenecks and shortages become more frequent, and inflation pressures begin to build. The Fed then rushes to tighten monetary policy in an attempt to make up for the earlier hesitancy to tighten. The traditional end result has been that the Fed’s late-cycle aggressive policies go to far (i.e., they over-tighten policy), the yield curve inverts, and a recession follows.

This cycle seems poised to follow that historical pattern. The Fed remains fearful of tightening too early and has told investors that they will react to the economy’s strength. Their reaction time will probably be slow as well. If our contention that reversing QE might stimulate the economy is correct, then the frequency and magnitude of Fed tightening is likely to accelerate as they realize they’ve created a monster. Their rush to equalize monetary policy with the strength in the economy could lead them to over-tighten and invert the yield curve. A recession would probably follow, and the cycle would end in a very traditional manner.” …”

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“Textron Inc. (TXT) cut forecasts for business-jet sales and group earnings for 2013 after first- quarter deliveries of the aircraft declined and profit missed analyst estimates.

The company now expects earnings per share from continuing operations of $1.90 to $2.10, versus a prediction in January of $2.10 to $2.30, and manufacturing-divison cash flow on that basis and before pension contributions of $400 million, compared with an earlier forecast of $500 million to $550 million…”

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“BOSTON—Authorities investigating the Boston Marathon blasts that killed three and injured more than 175 believe the two bombs were assembled from household pressure cookers, a crude but effective explosive that has been thwarted before in U.S. terror plots.

Investigators are exploring whether the bombs were assembled not far from the scene of Monday’s horrific explosions since transporting such improvised devices over any significant distance could trigger a premature detonation, according to a law-enforcement official with knowledge of the matter.

Working with local police, federal agents are canvassing Boston hotels and short-term rentals for clues on where the bombs could have been constructed, the official said.

More than 24 hours after the attacks, no one had claimed responsibility and no suspect had been identified.

Federal Bureau of Investigation agents, with the assistance of U.S. Customs and Border Protection personnel, have been scrutinizing passenger lists from flights that had recently arrived at Boston’s Logan Airport for clues, the official said.

Among the injured, more than 20 were in critical condition, hospitals said. Thirteen people had to have limbs amputated.

The blasts killed 8-year-old Martin Richard of Boston’s Dorchester section, whose mother and sister were seriously injured; 29-year-old Krystle Campbell, a restaurant manager from Medford, Mass.; and a Boston University graduate student whose identity wasn’t released. The Chinese Consulate, however, said a female Chinese citizen had died in the attack…..”

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“The tumbling gold price has personally cost billionaire hedge fund manager John Paulson at least $1.5 billion so far this year, as a decline in the price of the metal turned into a rout.

The estimated losses for Mr. Paulson, who has made and lost more money on gold than almost any other hedge fund manager, reflect a bold all-in bet on the precious metal

While many investors hold some gold in case of financial calamity or a return of the rampant inflation of the 1970s, since 2009 Mr. Paulson has allowed clients of Paulson & Co to denominate their holdings in gold, rather than US dollars….”

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“While almost no one was looking, a law making it easier for congressional and top executive branch staffers to engage in corrupt trading was signed into lawMonday.

The law is a modification of the Stop Trading on Congressional Knowledge (STOCK) Act. The modification was passed by unanimous consent by the House and the Senate last week with no debate or even discussion.

The STOCK Act, which became law just a year ago, was designed to discourage insider trading by members of Congress and top government officials. In addition to outlawing trading based on non-public information gleaned by government officials during the course of their public duties, the law required extensive disclosure of financial holdings by Congressional staffers and 28,000 senior executive branch employees.

The financial disclosures of these officials were to be posted in an online database open to the public.

The disclosure requirements were an important part of the law. They would have allowed researchers to detect abnormally successful trading activity by unelected senior government staffers—just as similar disclosure requirements for Congressmen and Senators had allowed scholars to produce evidence that suggested members of Congress were benefiting from non-public information.

Currently, although the reports of staff financial positions are officially part of the public record, they aren’t readily available. Often they have to be requested from individual agencies using the names of the individuals about whom information is sought. The result is that the public is effectively blocked from learning the information disclosed in the reports….”

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“U.S. officials said they had intercepted a letter sent to Senator Roger Wicker that tested positive on Tuesday for the deadly poison ricin, and that the U.S. Capitol police, FBI and other agencies had launched an investigation.

The letter was postmarked from Memphis, Tennessee, and had no return address, Terrance Gaines, the Senate sergeant at arms, said in a warning to members of the Senate.

“Senate employees should be vigilant in their mail handling processes for ALL mailings,” Gaines said in a written statement.

Members of the Senate were briefed on the ricin incident by Gaines during a meeting with FBI Director Robert Mueller and Janet Napolitano, the secretary of Homeland Security, on Tuesday on the bombings in Boston….”

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“Gold advanced for a second day in London on speculation that the biggest slump in three decades will spur increased purchases from investors and consumers. Futures declined in New York.

Bullion has lost 17 percent in 2013 after rising sixfold in a 12-year rally through last year. The metal slipped into a bear market on April 12 on speculation central banks in Europe may sell holdings to raise funds and that a U.S. recovery would spur the Federal Reserve to rein in stimulus. The 14 percent plunge in the two days through April 15 was the most since February 1983.

“If you look at the fundamentals, the drop was excessive and does not correspond to the reality that we still have a lot of troubles out there — debt monetization, real interest rates will remain in negative territory and the dollar in the long run still is a currency that won’t be that strong,” Dominic Schnider, head of commodities research at UBS AG’s wealth- management unit, said in a Bloomberg Television interview. “Nevertheless, a lot of damage has been done.”

Gold for immediate delivery gained as much as 1.3 percent to $1,386.25 an ounce and was at $1,383.47 at 11:47 a.m. in London. Prices touched $1,321.95 yesterday, the lowest since January 2011. Bullion’s 14-day relative strength index was at 23.8, below the level of 30 that indicates to some analysts who study technical charts that a rebound may be imminent….”

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“Treasuries rose, pushing 10-year note yields toward a four-month low, as a decline in stocks and commodities fueled demand for the safest assets.

Benchmark 10-year notes climbed for the fourth time in five days. Treasuries are outperforming U.S. stocks for the first time in five months on bets the Federal Reserve will maintain asset purchases and concern the global economy is slowing. New York Fed President William C. Dudley and his Chicago counterpart Charles Evans stressed the need for the central bank to maintain record stimulus yesterday. The U.S. will sell $18 billion of inflation-linked debt tomorrow….”

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“Bank of America Corp. reported a jump in first-quarter profit that missed analysts’ estimates as lower mortgage banking income slowed the firm’s turnaround. The shares dropped 3.3 percent in early New York trading.

Net income advanced to $2.62 billion, or 20 cents a share, from $653 million, or 3 cents, a year earlier, according to a statement today from the Charlotte, North Carolina-based company. The consensus of 25 analysts surveyed by Bloomberg had predicted 23 cents a share. Last year’s first-quarter profit was reduced by $4.8 billion in pretax-accounting charges.

Chief Executive Officer Brian T. Moynihan, 53, has sold more than $60 billion in assets, settled more than $40 billion in mortgage claims and repaired the bank’s balance sheet since taking over in 2010. He’s now focused on trimming $8 billion in annual expenses and adding revenue, which climbed 5.5 percent to $23.5 billion.

“Lower mortgage banking income and lower net gains on the sales of debt securities” weighed on results, the bank said in the statement. Excluding the impact of accounting charges, adjusted total revenue fell 8.4 percent from a year earlier to $23.9 billion.

The net loss at consumer real estate services widened to $1.31 billion from $1.14 billion a year earlier. Adjusted revenue slipped at the unit while noninterest expenses climbed 4.5 percent to $4.06 billion and margins narrowed, the bank said.

Biggest Banks…”

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“(Reuters) – No. 1 toymaker Mattel Inc reported stronger-than-expected first-quarter results, helped by tight cost controls and increased demand for American Girl and Monster High dolls.

The company, which is also known for its Barbie dolls and Hot Wheels cars, has raised prices globally and started making products for local consumption in countries such as Brazil and India to hold the line on costs.

Local production helps Mattel get products to stores faster and cut down on import duties and shipping costs, it told Reuters earlier this year.

During the quarter, net income rose to $38.5 million, or 11 cents a share, from $7.8 million, or 2 cents a share, a year earlier. Analysts on average were expecting a profit of 9 cents a share, according to Thomson Reuters I/B/E/S.

Smaller rival Hasbro Inc is due to report its quarterly results next week.

The first quarter is typically the least significant of the year in terms of sales for toy companies. They make more than a third of their annual revenue in the fourth quarter, which includes the all-important holiday selling season….”

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“(Reuters) – BNY Mellon Corp said on Wednesday that first-quarter revenue fell 1 percent as the world’s largest custody bank reported a loss due to a high-stakes tax battle with the U.S. Internal Revenue Service.

BNY Mellon’s net loss of $266 million, or 23 cents a share, reflected a U.S. Tax Court decision announced in February that triggered a previously announced $854 million charge against profits.

In the year-earlier quarter, BNY Mellon reported net income of $619 million, or 52 cents a share.

Excluding the tax-related charge, the bank earned 50 cents a share, missing the average analyst estimate by 2 cents, according to I/B/E/S Thomson Reuters.

Revenue totaled $3.61 billion, down 1 percent from a year ago. Bright spots included 10 percent gains in both investment management and performance fees, and foreign exchange trading.

Net interest revenue at the bank, however, fell 6 percent to $719 million, reflecting lower yields on reinvested securities and the elimination of interest on European Central Bank deposits.”

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