A lack of investment in oil projects will likely come back to bite the energy market, the CEO of one of the world’s largest sovereign wealth funds told CNBC.
“When you look at the investments in exploration projects all over the world … It has been depleted, and I believe we will see the results of that in the coming years,” Mubadala CEO Khaldoon Al Mubarak told CNBC. Abu Dhabi-based Mubadala has around $125 billion of assets under management and specializes in buyout investments.
The price of oil tumbled from $120 a barrel in June 2014 due to weak demand, a strong dollar and booming U.S. shale production. OPEC’s reluctance to cut output was also seen as a key reason behind the fall. But the oil cartel and other crude-producing nations moved to curb production in late 2016. Oil and gas firms worldwide have subsequently cut their share in investment given the subdued market prices.
“It has been challenging from one perspective dealing with a lower oil price environment but at the same time, very opportunistic because it helped us move faster down the diversification strategy,” Mubadala’s Al Mubarak said.
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‘Bread and butter’ of the economy
Abu Dhabi, the capital of the United Arab Emirates and home to around 6 percent of the world’s proven oil reserves, is looking to reduce its reliance on crude after prices collapsed in recent years.
Mubadala’s CEO said Abu Dhabi had reduced its reliance on oil over the years from approximately 90 percent of its GDP (gross domestic product) to less than 35 percent. However, while the need to diversify away from a heavy reliance on oil was a priority, Al Mubarak said crude would continue to be the “bread and butter” of the economy.
“It has been a successful strategy and I think we have to continue down that road, but it doesn’t mean that we are going to move away from oil and gas,” Al Mubarak said.
Meanwhile, OPEC and other non-OPEC producers are poised to meet in Vienna on Thursday to decide on oil output policy.
OPEC members are reportedly forming a consensus to extend their production cutting deal with other crude exporters. That would prolong the agreement among OPEC, Russia and other oil-producing nations to keep 1.8 million barrels a day off the market through the whole of next year.
Google and Goldman Sachs are two of the most active corporate investors in blockchain companies, according to a industry report.
Blockchain is the underlying technology behind cryptocurrencies like bitcoin. But it is also being developed for use in a variety of industries from finance to insurance, promising cheaper and faster processes.
The number of corporate investors in blockchain companies hit a record high of 91 this year, just behind the 95 venture capital firms in the space, according to a report by data firm CB Insights published Tuesday.
So far this year, there have been 42 equity investment deals by corporates, totaling $327 million. This is just behind the $390 million for the whole of 2016.
Japanese financial services firm SBI Holdings is the most active corporate investor, having stakes in eight blockchain firms. These include R3, a consortium of banks working on new applications for blockchain technology, and Kraken, which is an exchange for people to trade cryptocurrency.
Alphabet-owned Google is the second-most active corporate, with investments in bitcoin wallet company Blockchain, and Ripple, a company that is working on money transfers using blockchain technology.
Overstock.com is third, while U.S. banks Citi and Goldman Sachs are in fourth and fifth place respectively. Both companies have investments in Digital Asset Holdings, which is run by former JPMorgan Chase executive Blythe Masters.
“Big banks and financial services firms were the first corporate players to make direct blockchain investments en masse — unsurprising, given how Bitcoin’s underlying technology lends itself, both technically and in popular thought, to financial services,” CB Insights notes in its report.
Large financial institutions are experimenting with ways that blockchain technology could be used, from trade finance, to moving money.
Since June 2014, the 10 largest U.S. banks by assets have participated in nine rounds totaling $267 million in disclosed funding to six blockchain companies, the report said.
At the same time, many banks are part of consortia aimed at exploring and developing blockchain technology. Hyperledger, the Enterprise Ethereum Alliance, Ripple and R3 are all consortia working with banks.
ICOs risk ‘over-capitalization’
The rising number of blockchain companies and interest in the technology has also brought bigger investment from other sources such as venture capitalists and so-called initial coin offerings (ICOs).
At the current run rate, 2017 is on pace for 188 equity deals worth more than $830 million, up from 138 and $545 million in 2016, CB Insights said. Mega deals such as the $107 million raised by R3 and the $100 million raised by Coinbase have helped to boost the figure.
But ICOs, where start-ups issue new tokens, similar to shares, in exchange for funds, have been growing rapidly. Total funds raised by ICOs surpassed the total funds raised via traditional equity financing for the first time in the second quarter of 2017, CB Insights said. More than $3 billion has been raised via ICOs, according to Coinschedule, a website that tracks the offerings.
Some of the biggest ICOs include Filecoin, which raised $257 million, and Tezos, which got over $230 million in funding.
But with the ICO craze also comes the risk of “over-capitalization” with teams “receiving too much money too quickly,” CB Insights warned.
Blockchain firms ‘failing at a higher rate’
The number of companies raising early-stage or seed funding via traditional equity deals, not ICOs, has declined over the past few years.
But the risk of these companies failing is much higher than start-ups in other industries.
The number of companies raising early-stage or seed funding via traditional equity deals, not ICOs, has declined over the past few years.
But the risk of these companies failing is much higher than start-ups in other industries.
Of 103 blockchain companies that received initial seed or angel funding in 2013 to 2014, only 28 managed to raise further money. In comparison, of the 1,098 tech companies CB Insights tracked that raised seed rounds in the U.S. between 2008 and 2010, 46 percent raised a second round of funding.
“Blockchain’s consolidation may be tight, with blockchain companies failing at a higher rate than tech startups in other areas,” the report said.
Producers hit by a slump in Canadian crude prices can earn an extra $23 a barrel by sending it to the new Alberta refinery.
CALGARY – For years, Ian MacGregor has been widely criticized for pushing the Alberta government to support more refineries within the province and that criticism only escalated as costs for his North West Refinery project soared to $9.5 billion over time.
But amid the scorn from politicians and even within the oilpatch, against all odds the refinery in Sturgeon County near Edmonton produced its first diesel from bitumen this month — the first refinery to be built in Canada in more than 30 years.
“If there’s any emotion that I have right now, it’s not that I’m right. It’s that I’m sad,” says MacGregor, the president and chief executive officer of North West Refining, which owns 50 per cent of the project, along with partner Canadian Natural Resources Ltd. that owns the other half.
MacGregor is despondent that the start coincides with a precipitous drop in Canadian heavy oil prices compared to refined products that has hurt Alberta – a development which strengthens MacGregor’s case for more refining capacity in the province. “I feel sad because it’s bad for Alberta,” he said, of the price drop.
Despite the near-doubling in costs of the project from an estimate of $5.7 billion in 2013 to $9.5 billion, oil producers who are sending their bitumen to the Redwater refinery are earning an extra $23 margin on every barrel after paying fees to the refinery, MacGregor said.
The refinery currently produces 20,000 barrels of diesel per day, and the CEO expects it to reach full capacity of 80,000 bpd by the summer.
The project may be a welcome relief for heavy oil producers that have seen WCS differential against WTI jump to $25 per barrel in December and are bracing for it to persist for some time.
In a recent report, RBC Capital Markets analyst Greg Pardy noted that “Canada’s oil exports are set to materially exceed export pipeline capacity in the first quarter of 2018,” leading him to raise his differential forecast between WCS and WTI from US$12 per barrel to US$15.50 per barrel next year, and from US$14 per barrel to US$17.50 per barrel in 2019.
Other factors are also conspiring against the WCS. The International Maritime Organization, which regulates the global shipping industry, has announced the industry would switch to fuel blends that emit less sulphur dioxide beginning in 2020, a move which would “will likely result in wider WCS spread vis-à-vis sweet benchmarks in 2020-2022,” Pardy said.
Fitch Ratings also expects differentials between WCS and WTI to remain wide due to “the current lack of pipeline capacity out of Canada in the face of growing oilsands production and after 2020, the phaseout of high-sulphur fuel oil as a marine fuel, which is also expected to weigh on the WCS discount.”
MacGregor said these factors strengthen his argument that more Canadian oil should be refined in Alberta. Doing so would allow domestic oil producers to make better use of existing export pipelines because they’d be able to send more barrels out of the province by using fewer blending agents to dilute bitumen.
With 15 million barrels of oil storage capacity in Alberta, a single pipeline outage such as the one on TransCanada Corp.’s Keystone mainline in November, caused 8 million barrels to be placed into storage in the province.
“With the incident on Keystone, that really is a preview of what the future is going to look like in my mind,” MacGregor said. “Really, what that’s telling us is we’re at the end of a really long system and if anything goes wrong with it, then that depresses the price of bitumen in Alberta.”
North West Refining has made the case to the Alberta government to support the second phase of the refinery in the same way it supported the first 50,000 bpd phase – through loan guarantees and by committing its bitumen barrels to the project through a royalty-in-kind program.
Those commitments led to former Progressive Conservative finance minister Ted Morton calling the project “a boondoggle” and NDP politicians, while in opposition, characterizing further government commitments as “good money after bad.”
No decision is expected on a second phase until the first is fully operational, MacGregor said.
MacGregor’s case hinges on the economics of new refining capacity in Alberta that many economists believe have improved in recent years.
The combination of changing IMO fuel standards, a lack of export pipeline capacity and cost deflation in Alberta from the recession that began in 2014 have improved expected returns on new refineries in the province, IHS Markit executive director and oilsands analyst Kevin Birn said.
Birn published a study in November that showed returns on new refining and upgrading investments in Alberta had become more feasible in recent years, but it also showed the returns had improved by a wider margin in competing jurisdictions such as the U.S. Gulf Coast, U.S. Midwest and in Asia.
The study pegs the internal rate of return on a new refinery project near Edmonton at 10 per cent, compared to 15 per cent in Asia. It puts the expected IRR on converting an existing light oil refinery to process bitumen in Alberta at 20 per cent, compared to 25 per cent in Asia and similar levels in the U.S.
“Development of new processing capacity takes years, and the degree of today’s cost savings could diminish as oil prices gradually recover and activity returns in the coming years,” the report noted. As a result, it also found that “Alberta remained the highest-cost jurisdiction.”
Birn said the competition between these competing jurisdictions creates a challenge for projects in the province.
“Do you build a facility on a speculative, artificially wide differential because you have challenges building (pipeline) infrastructure in Alberta?” Birn said.
MacGregor says he understands the criticism that Alberta has historically been a high-cost jurisdiction for building multi-billion-dollar energy projects, but there are fewer and fewer realistic alternatives every year as new export pipelines keep getting delayed.
MKM Partners predicts Alibaba will reach the vaunted trillion-dollar valuation ahead of its internet peers.
“It seems likely to us that we will have multiple $1 trillion valuation companies within the next 1-3 years if the current bull market continues. In this note, we examine the pathways of the six leading contenders: Apple, Google, Amazon, Facebook, Tencent and Alibaba,” analyst Rob Sanderson wrote in a note to clients Friday entitled “Pathways to $1 Trillion Valuation and Who Arrives There First.”
“An argument can be made for each company achieving $1 trillion in market cap by 2020, with a case for Apple in 2019. We think it’s most likely 2021 when the barrier is broken by an Internet company, but think BABA may have the best chance for 2020 despite being the smallest of the mega-caps today.”
Alibaba (BABA) 1-Year Chart
Sanderson reiterated his buy rating and $220 price target on Alibaba shares, representing 28 percent upside from Thursday’s close.
Alibaba has a market value of nearly $440 billion, according to FactSet. Its shares have shot up 96 percent this year, compared with the S&P 500’s 20 percent return.
The analyst noted online commerce is growing more than twice the rate in China versus the U.S., while Alibaba’s monetization rate is one-sixth to one-eighth of Amazon’s.
“We believe that opportunities for further monetization gains are plentiful, largely within the company’s control and that ad-loads represent a considerable growth driver that is at the discretion of management,” he wrote. “We think that BABA may have the best chance among Internet mega-caps to become the first $1 trillion company.”
Sanderson believes Alibaba can reach a $1 trillion market cap by 2020 if it generates earnings-per-share 20 percent above expectations in 2018, grows earnings by 45 percent in 2019 and preserves its 24 times forward price-earnings ratio.
To be sure, the analyst said there were many risks to Alibaba’s future including its ability to raise ad load, prospects for its many investments such as Ant Financial, and losses from its Alicloud and other businesses.
Scientists from Harvard University have just unveiled a new gene editor that uses the revolutionary CRISPR-Cas9 technology to target and change a single letter in a string of DNA bases — no cutting necessary.
Considering that there are billions of letters in the human genome, converting one letter to another may not sound like much. But tens of thousands of human diseases can be traced to these tiny mistakes, scientists say.
If traditional gene editing is like taking a pair of molecular scissors to a DNA strand to alter a genome, then the new technique, known as base editing, is like using a pencil and eraser, scientists say.
Both methods have their place.
“If your task is to cut and paste something, then you need scissors. If your task is to fix just a single letter, a pencil is best,” said David Liu, a chemical biologist at Harvard University who led the work.
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The first base editor was described by Liu’s group last year. At that time, however, they could only use the technology to turn the base cytosine (known in the DNA alphabet as C) into a base that acts like a thymine (known as T).
In the new study, published Wednesday in the journal Nature, the authors present a second base editor that can convert the base adenine (A) into the base inosine (I), which acts like guanine (G).
[Image Caption: Of the tens of thousands of human diseases that have been traced to a mistake in a single letter of DNA coding, nearly half could be fixed by changing an A to a G. (David Liu et al, Nature)]
The new work is significant because it will allow scientists to use base editing to address many more single-letter mutations than was previously possible, said Krishanu Saha, a biomedical engineer at the University of Wisconsin Madison who was not involved with the research.
“This is another nice example of using protein engineering to diversify the types of edits that the CRISPR system can accomplish,” he said.
There are 3 billion base pairs in the human genome, and a mistake or mutation in just one single letter can have a significant impact on a person’s health.
Of more than 50,000 genetic changes currently known to be associated with disease in humans, 32,000 of those are caused by the simple swap of one base pair for another, Liu said.
The group’s first base editing tool, which had the effect of converting a C to a T, has the potential to correct 14% of human diseases associated with a single-letter mutation. The new tool will allow researchers to address an additional 48% of these types of diseases.
The type of mistake that can be targeted by the new base editor is “by far, the most common kind” in people “and probably all living systems,” Liu said.
The team’s new base editor can fix these genetic errors by rearranging the atoms in a single faulty A and turning it into an I. The editor can also alter the T that was paired with the original A in the double-stranded helix of DNA and turn it into a C, Liu said.
Like the previously described base editing system, the new editor relies on the CRISPR-Cas9 complex to locate a specific sequence of bases within a genome and bond to it. Normally, CRISPR-Cas9 would then make a double cut in the DNA and either insert or delete genetic information, but Liu’s group uses a crippled form of CRISPR that can’t make a cut.
Instead, it pulls the DNA strand away from its partner, allowing an enzyme attached to the CRISPR system to change the base at the target site.
Although Liu and his lab partners had successfully engineered one base editor before publishing their most recent work, they faced fresh challenges when they set about creating an editor that could alter an adenine.
In previous work, the team took gene-editing tools found in nature and then synthesized them to create a targeted single base editor.
Unfortunately, nature doesn’t make an enzyme that can convert an A to an I in DNA. That meant they had to evolve one in the lab.
“We have an 18-year rule in our laboratory, unbroken until now, that it is unwise to embark on a project in which the first step requires the evolution of the starting material for steps 2 to 20,” Liu said. “But in this case, we thought the potential usefulness of an adenine base editor was worth the risk.”
It took more than two years, but ultimately, they were successful. After lots of trial and error, first author and post doctoral fellow Nicole Gaudelli was able to generate an enzyme that can convert AT base pairs to GC base pairs in human cells with an average efficiency of 53% and almost no errors.
It’s not perfect, but it’s a vast improvement over other methods currently in use to address point mutations.
In the paper, the authors compared their adenine base editor with the more traditional gene editing approach known as homology directed repair, or HDR. They report that their new tool was about 10 times more efficient than HDR, and resulted in at least 100 times fewer undesired products like random insertions or deletions.
The researchers also offered a glimpse at how their editor might be used in the future to combat genetic diseases.
In one experiment, they went after a point mutation that is a common cause of hereditary hemochromatosis, which causes an excessive build-up of iron in a patient’s blood that can be fatal. Using their adenine base editor, they were able to correct the mutation in cells derived from a patient with HHC.
In a second example, the team used its new base editor to install a pair of mutations that activate genes that code for the production of fetal hemoglobin. These genes are usually silenced around birth, but they can be used to protect against certain blood diseases like sickle cell anemia if they are allowed to remain active through adulthood.
These early demonstrations are promising, but Liu cautioned that base editors will not be used to address genetic diseases in living humans any time soon. (The aforementioned experiments were all done on cells grown in petri dishes).
Before that can happen, researchers will have to determine the best way to deliver the base editor machinery to the right tissues in the body and into the right cells. They will also have to figure out when in a patient’s life is the best time to deliver a certain gene therapy. To that end, his lab is collaborating with other labs that have expertise in genetic diseases.
“A tremendous amount of work is needed before this molecular machine can be used to treat diseases in humans,” he said. “But having a machine is an important starting point.”
The new base editing technique was reported on the same day that scientists from MIT and the Broad Institute announced a method for editing RNA, the molecules that translate DNA’s instructions into protein production.
By editing the letters in RNA, scientists hope to turn the protein-production machinery of certain cells on and off without making permanent changes to a person’s genetic code. The technique, which goes by the acronym REPAIR and is described in the journal Science, has the potential to treat diseases of the brain, muscles, liver and kidney as well as cancer and autoimmune disorders.
Cars that fly or drive themselves aren’t available to the public yet, but many cutting-edge technologies are already featured in today’s vehicles.
More car companies are leaning on innovations coming out of Silicon Valley and elsewhere to make getting behind the wheel less of a hassle and more fun.
Here are some of the coolest features that tease the future of driving, from windshield projections to never needing to park again.
Cameras Galore
Humans are no longer the only ones to see the road ahead.
Cars are increasingly outfitted with sensors, especially cameras. With the help of computer vision software, cameras are able to identify signs — such as the speed limit — and adjust accordingly.
Ford offers a speed-limiting feature on several of its European cars, including the Kuga, Edge, S-Max and Galaxy. A driver in one of those vehicles can set parameters to prevent driving more than 5 mph above the speed limit. Rather than applying brakes to keep a driver at that speed, it limits the amount of fuel to the engine.
Cameras are also playing a big role in autonomous vehicles, such as helping them see around corners or detecting people and objects on the road.
Meanwhile, the Cadillac SuperCruise uses a camera on the steering column to monitor a driver’s eyes. It knows when a driver’s eyes turn away from the road for too long and flashes a light to help them re-focus.
2. Autonomous driving
Cars that drive on their own are a few years away. But some automakers are rolling out features that let motorists enjoy a small taste of the future.
Tesla’s Autopilot feature touts auto-steering and automatic emergency braking. On some roads, the vehicle can identify lane markers and steer to remain in the lane. If a driver doesn’t see a pedestrian or other obstacle, automatic emergency braking activates to stop the car.
The car is guided by eight cameras, 12 ultrasonic sensors and radar technology, often used on ships and planes, to locate the direction and distance of objects. High-end models from Mercedes-Benz, General Motors and Volvo offer similar systems.
Meanwhile, cars such as the Toyota Camry and Honda Civic currently feature adaptive cruise control, allowing them to automatically keep pace with the vehicle ahead of it.
The terms autonomous driving and self-driving are often used interchangeably. But there’s a scale of autonomy ranging from low-end features like cruise control to high-end vehicles that are so self-sufficient they don’t need steering wheels or pedals.
3. Parking assistance
Automakers want to eliminate the hassle of parking.
Although many companies offer a parallel parking function to guide drivers into spots, some manufacturers — including Tesla and BMW — are taking it a step farther. Automated parking doesn’t require a driver to be in the car.
The BMW 7 Series can be pulled in and out of tight spaces while the driver waits outside the vehicle. Drivers push a button on their key to instruct the car when to pull in or out of a parking spot.
Some Tesla cars can be summoned with a smartphone and slowly drive itself to meet its owner. The vehicles can also be synced with garage doors, so they can independently enter and exit while drivers wait outside.
4. Windshield displays
One solution to the danger of drivers taking their eyes off the road is a heads-up display, which project images onto windshields. This helps prevent drivers from looking away from the road to get information, such as navigation and speed.
The Lincoln Navigator offers a heads-up display so crisp it can be seen even if a driver is wearing polarized sunglasses. These displays have become a common option among luxury brands such as Jaguar, BMW and Audi.
5. Hybrid technology
You might expect hybrid cars to fade away as we move toward electric vehicles. But with more fuel economy demands, you’ll like see new hybrids hit the market in the years to come.
Many of these cars will be “mild hybrids,” which don’t boost efficiency as much as regular hybrids but cost less, thanks to smaller, less powerful batteries.
The batteries and electric motors in mild hybrids aren’t strong enough to move the weight of the car on their own but they provide some boost to the engine, allowing it to work efficiently and save fuel. As with other hybrids, batteries are charged from the gas engine directly or by recovering energy during braking.
The 2018 Jeep Wrangler will be available with a mild hybrid system like this.
On the other end of the spectrum, we’ll likely see more plug-in hybrids such as the Toyota Prius Prime. These cars use powerful batteries that can be charged from an external source and typically run on only electricity for a considerable distance.
6. A smartphone on wheels
More smartphone innovation is coming to cars. Apple CarPlay and Android Auto are increasingly common — the infotainment systems are now available on 600 car models. These services make it easy to do anything you’d do with your smartphone within the car, like access apps, make calls via voice assistants and get text messages read aloud.
A driver can also map a potential destination with a smartphone app before leaving the home, so you don’t have to type the address into the car’s computer. Meanwhile, CarPlay can predict where you may be driving by using addresses from your email and text messages.
The cost of these services vary by manufacturer.
7. Gasoline engine tech
Gas-powered engines are far more efficient than they’ve ever been. But even as electric cars seem nearly ready to replace gas engines, engineers are still finding ways to squeeze more from the 150-year-old technology.
Many automakers have been trying to perfect what’s known as Homogenous Charge Compression Ignition — a way of making gasoline engines behave like their efficient cousins, diesel engines.
Mazda engineers have designed one that uses air compression and is 30% more efficient. Although diesel engines ignite fuel without a spark plug, Mazda’s effort — due out in 2019 — sometimes uses one. That’s because it’s not always most efficient to use a compression ignition. Mazda’s engine works whichever way is best given the situation at any moment.
Meanwhile, engineers with Nissan’s luxury division Infiniti have developed an engine with variable compression by giving the piston, which compresses the air, variable range of movement.
When combined with turbocharging, which uses small turbines to force more air into the engine, it promises super-fast performance with better fuel economy.
8. Launch control
You may think quickly accelerating a car is as simple as mashing the gas pedal to the floor. But that would likely result in a lot of noise, back tires spinning out and you struggling to keep the wheels straight.
That’s why many high-performance cars — including the Dodge Challenger Demon, Ford GT, Acura NSX, and Lamborghini Aventador — have something called “Launch Control.”
The tech works by doling out as much power as possible until sensors detect if the wheels are losing their grip on the road. The system keeps power right on that knife-edge between maximum takeoff and out of control.
While you wouldn’t want to do this in a real driving situation, Launch Control is a way to have fun on an open track with the all that horsepower you purchased.
American shoppers spent a record $5 billion in 24 hours. That marks a 16.9% increase in dollars spent online compared with Black Friday 2020, according to data from Adobe Digital Insights, which tracks 80% of online spending at America’s 100 largest retail websites.
Digital retail giant Amazon said Friday that orders were rolling in “at record levels.” More than 200,000 toys were sold in just the first five hours of the day, the company said. Amazon did not provide sales figures for Black Friday.
Meanwhile, malls and big-box retailers were left only slightly emptier.
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Early estimates from ShopperTrak, a data analytics company that measures the number of shoppers at stores, said foot traffic “decreased less than one percent when compared to Black Friday 2020.”
A meager dip is good news for traditional retailers. As online-savvy businesses continue to gobble up more and more of the market share, companies like Macy’s (M), JCPenney (JCP), Gap (GPS) and Sears (SHLD) have suffered.
It remains to be seen exactly how much in-store shoppers were willing to spend. That will be a crucial data point in assessing retailers’ woes.
Related: Is this the last Black Friday?
But Brian Field, senior director of advisory services for ShopperTrak, is optimistic.
“There has been a significant amount of debate surrounding the shifting importance of brick-and-mortar retail, and the fact that shopper visits remained intact on Black Friday illustrates that physical retail is still highly relevant and, when done right, profitable,” Field said in a statement.
Looking at both Thanksgiving Day and Black Friday, however, in-store foot traffic was actually down nearly 2% compared to the same two days last year.
Field says that’s likely because “a greater number of brick-and-mortar retailers opted to close on Thanksgiving Day.”
We’ll know more about how it all shakes out in the coming months and early 2022, when big-box retailers post their next round of earnings reports.
In the meantime, there’s plenty of busy holiday shopping days to come.
Adobe predicts that Cyber Monday will be even bigger than Black Friday, bringing in as much as $6 billion in digital sales.
The race to get bitcoin futures is now on. The CBOE announced Monday it would begin trading bitcoin futures on Sunday evening at the start of global trading hours.
The first full day of trading would be on Monday, Dec. 11. That would beat the CME, which has announced it, too, will begin trading bitcoin futures on Dec. 18, a week later, and the Nasdaq, which is also planning to introduce futures trading in the first half of 2018.
Bitcoin enthusiasts are hopeful that a bitcoin ETF might be coming. The SEC denied applications to start bitcoin ETFs earlier in the year on the grounds that the cryptocurrency was “unregulated,” but CBOE head Ed Tilly said he plans to reapply with the SEC for a bitcoin ETF.
The argument seems to be a simple one. The presence of a futures market will demonstrate that the cryptocurrency is sufficiently “regulated” to allow ETFs to start.
The argument may be helped by two features that will be a part of the bitcoin futures: price limits and margin rates.
The CBOE and CME will have margin rates of 30 percent and 35 percent, respectively.
In addition to being able to short bitcoin, there’s considerable speculation about whether futures will lower or increase the volatility level of bitcoin. The CME, for example, says it will be using price limits that kick in during gains or losses of 7 percent, 13 percent and 20 percent that would slow and in some cases halt trading. In particular, prices will not be allowed to move up or down more than 20 percent from the prior day’s close. If that limit is hit, trading can only continue at or within the +/- 20 percent limit for the remainder of the trading session.
There may even be a price war developing for the business. The CBOE made a point in its press release this morning to say trading would be free through December, but doesn’t say how much it would be after.
The CME says bitcoin futures will be priced at a premium to standard Equity Index futures, but in line with the pricing conventions of other premium products.
Share prices for both the CME (NASDAQ: CME Group, Inc.) and CBOE (NASDAQ: Cboe Global Marjets, Inc.) rose sharply in the weeks leading up to the futures trading launch.
Coca-Cola Co., facing a world where consumers fill up Amazon baskets instead of grocery carts, is trying to raise its tech game.
The 131-year-old beverage company is taking its understanding of driving real-life traffic to the world of e-commerce. That includes upping the appearance of its “digital shelf,” integrating with voice products like Amazon’s Echo, and adding impulse buy opportunities to click-and-collect pickup lockers.
Coke showed off its progress in a room dedicated to digital commerce at an investor day event Thursday.
“We’ve spent a lot of time and effort through the years on developing great-looking packaging for the consumers to really grab people’s attention at retail,” said John Carroll, Coca-Cola’s general manager of e-commerce. “The question becomes how do you take this thinking and move it to online?”
Online shopping has two parts to address: first, how the consumer purchases the product and second, how shoppers receive their goods.
On the buying side, Coke has worked to make its digital shopping pages more attractive and content heavy. Instead of just having a box to click for purchase, products now have pages that tell their brand stories and functional benefits, Carroll said. For example, the Smartwater page describes that the drink was “inspired by clouds.”
Coca-Cola is also getting in on the food-delivery business with meal kits and voice ordering. The Atlanta-based company has added beverage pairings to Chef’d boxes. Coke showed how Amazon’s Echo can drive impulse buys by having the device ask if the consumer wants to add on a drink at the end of a food-delivery order.
Last-Minute Add-Ons
For click-and-collect customers — people who have purchased items online and are picking them up in stores or in specified lockers — Coke is also working on promoting last-minute purchases. When the consumer gets in close proximity to pickup lockers, for example, Coke is working with partners to suggest adding drinks to the packages.
In all of these efforts, Coke is focusing on its existing customers to drive digital sales. The company is trying out some direct-to-consumer “experiments,” but will largely focus on working with grocers and other online partners, Chief Executive Officer James Quincey said.
“Clearly digital is a core component,” he said. “It’s almost in danger of becoming everything and, at times, nothing. Therefore, I think it’s really important we break it down and get specific.”
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