Closing Market Summary: Consumer Staples and Health Care Weigh on AveragesThe major averages ended Tuesday on a lower note, erasing yesterday's gains. Today's trade featured a hotter-than-expected reading of April CPI (+0.4%; consensus +0.3%), hawkish commentary from FOMC members, a breach of the 50-day simple moving average (2056.90) in the S&P 500 (-0.9%), and the underperformance of consumer discretionary (-1.2%), health care (-1.1%), and technology (-1.1%). The Nasdaq Composite (-1.3%) ended behind both the Dow Jones Industrial Average (-1.0%) and the benchmark index (-0.9%).
Today's session began on a lower note as investors looked to the possible rate hike implications stemming from a hotter-than-expected reading of inflation in April. Meanwhile, Home Depot (HD 132.00, -3.34) came under pressure despite reporting above-consensus quarterly results. Additionally, the market maintained a negative bias after disclosures that George Soros placed bearish bets on the broader market by doubling his put position on the SPDR S&P 500 ETF (SPY 204.85, -1.92) and boosting his holdings in gold.
The S&P 500 (-0.9%) tested and briefly defended support near its 50-day simple moving average (2056.90) in the late morning, but was unable to do so again when that level was re-tested in the afternoon. As a result, the major averages extended their losses through the final hour. Nine sectors ended in the red with consumer staples (-1.9%), utilities (-1.7%), consumer discretionary (-1.2%), and health care (-1.1%) rounding out the leaderboard.
In the consumer staples sector (-1.9%), Kraft Heinz (KHC 82.16, -3.71) displayed relative weakness, losing 4.3%. Meanwhile, Hormel Foods (HRL 38.80, -1.44) ended lower by 3.6% ahead of tomorrow morning's earnings report. The broader sector trimmed its May gain to 0.3%, trailing only technology (-1.1%; month-to-date +0.4%) over that time.
Drug manufacturers displayed relative weakness in the health care space (-1.1%) as the sub-group moved lower in sympathy with AbbVie (ABBV 60.25, -2.20). The company fell 3.5% after receiving a negative ruling regarding its patent on a dosing regimen involving its rheumatoid arthritis medication. Conversely, Valeant Pharmaceuticals (VRX 29.08, +2.03) gained 7.5% after Citron's Andrew Left confirmed that he has opened a long position in the stock.
In the consumer discretionary space (-1.2%), Home Depot declined 2.5% despite topping analysts' estimates for the quarter. Fellow home improvement name Lowe's (LOW 76.07, -0.93) slipped 1.2% ahead of tomorrow morning's quarterly report.
Interest rate-sensitive real estate investment trusts (REITs) underperformed in the financial sector (-0.7%). The sub-group was pressured by the hotter-than-expected CPI reading and hawkish commentary from FOMC members. San Francisco Fed President Williams, Atlanta Fed President Lockhart, and Dallas Fed President Kaplan each said that an interest rate hike may be warranted sooner than the market currently anticipates one. For the June Fed meeting, the likelihood of a rate increase, as measured by the fed funds futures market, jumped to 15.0% from yesterday's 3.8% estimate.
The U.S. Dollar Index (94.52, -0.01) ended slightly lower as the euro and the yen ended flat against the greenback. The dollar/yen pair finished higher by 0.1% at 109.09 while the euro ended at 1.1316 against the dollar. Separately, pound sterling gained 0.4% against the dollar (1.4462).
The Treasury complex ended on a mixed note with the yield on the 10-yr note ending higher by one basis point at 1.76%.
Today's participation was above the recent averages as more than 1.02 billion shares changed hands on the NYSE floor.
Today's economic data included April Core CPI, April Housing Starts, April Building Permits, April Industrial Production, and April Capacity Utilization:
- The Consumer Price Index (CPI) for April produced a headline surprise, with total CPI rising 0.4% month-over-month (consensus +0.3%) and core CPI, which excludes food and energy, increasing 0.2% as expected.
- The seasonally adjusted all items increase was broad-based, with the indexes for food, energy, and all items less food and energy rising in April.
- The move, though, was powered by a 3.4% increase in the index for energy, which featured an 8.1% jump in the gasoline index.
- A 0.3% increase in the shelter index and a 0.3% increase in the medical care services index were big drivers of the 0.2% increase in core CPI; however, those increases were mitigated somewhat by a 0.3% decline in the indexes for new vehicles, used cars and trucks, and apparel.
- Over the last 12 months, CPI is up 1.1% on an unadjusted basis versus 0.9% in March. Core CPI is up 2.1% versus a 2.2% increase seen in March.
- It's possible the Fed could use the uptrend in CPI as a basis for raising the fed funds rate in June, although we suspect the fed funds futures market still isn't going to be buying into that notion.
- Housing starts increased 6.6% month-over-month to a seasonally adjusted annual rate of 1.172 million units (consensus 1.135 mln). The starts rate for March was revised up to 1.099 million from 1.089 million.
- Building permits increased 3.6% to a seasonally adjusted annual rate of 1.116 million (consensus 1.130 mln). Permits for March were revised down to 1.077 million from 1.086 million.
- Total housing starts are 1.7% below the April 2015 rate while total building permits are 5.3% below the April 2015 estimate.
- Single-family starts increased 3.3% in April to 778,000, led by a 12.8% gain in the Midwest and a 9.0% increase in the South. Both the Northeast (-1.8%) and the West (-14.1%) saw a drop in single-family starts.
- The rise in permits was driven by an 8.0% increase in permits for multi-family units, although permits for single-family units increased 1.5%.
- The number of homes under construction increased to 999,000 from 994,000 in March. This will be a positive input for Q2 GDP forecasts.
- After a string of largely disappointing data, the Industrial Production report for April proved to be a positive surprise as production increased at a faster than expected rate of 0.7% (consensus 0.2%).
- Capacity utilization also surprised to the upside, coming in at 75.4% (consensus 75.0%).
- The April reading represented the first increase in three months while the previous month's reading was revised down to -0.9% from -0.6%. On a year-over-year basis, industrial production is down 1.1%.
- Most notably, the utilities index spiked 5.8% while the final products index increased 1.0% on the back of a 1.2% growth in consumer goods.
- The only category that registered a decline in April was mining. The mining index fell 2.3% and is now down 13.4% year-over-year. The decline in mining was not enough to offset the spike in utilities, leading to a 0.3% uptick in manufacturing output.
- Looking at capacity utilization, total industry capacity grew 1.0% year-over-year with utilities showing the largest sequential increase (up 420 basis points to 78.6%). Mining capacity utilization declined to 72.5% from 74.0%, which represents a new record low.
Tomorrow's economic data will be limited to the 7:00 ET release of the weekly MBA Mortgage Index; however, the the Federal Open Market Committee will release the minutes from the April 27 meeting at 14:00 ET.
- Nasdaq Composite -5.8% YTD
- Russell 2000 -3.0% YTD
- S&P 500 +0.2% YTD
- Dow Jones +0.6% YTD
Flood of Foreign Cash Flattens Yield Curve
Why a popular market gauge of U.S. economic health has become more ambiguous
ENLARGE
A wave of money fleeing low or negative interest rates overseas is helping to push down long-term Treasury yields, hobbling a popular market gauge of U.S. economic health.
The “yield curve,” measuring the premium investors receive for the risk of holding 10-year U.S. government debt, rather than two-year notes, on Tuesday declined to 0.94 percentage point, the lowest since December 2007. A year ago, the gap was 1.65 points.
The curve now is said to be flattening, a condition that bears scrutiny because it could lead to a situation in which short-term rates exceed long-term ones. That happened in the U.S. in June 2007, shortly before the financial crisis, and in December 2000, ahead of the 2001 downturn.
Yet some traders and portfolio managers caution that the yield curve’s predictive value may have fallen victim to the age of easy money, in which the flow of cash around the world dwarfs the economic trends that market indicators have long been taken to illuminate.
While many U.S. investors doubt the 10-year Treasury is a bargain at its recent yield of 1.75%, investors in Europe, Japan and elsewhere have been large buyers because yields available in their home countries are even lower. The pool of negative-yield bonds hit $9 trillion this month.
The U.S. yield curve is "distorted because of negative interest rates abroad,’’ said Torsten Slok, chief international economist at Deutsche Bank Securities.
The failure of U.S. yields to increase in recent months, even as the recession scare early in the year ebbed, has struck many investors as a sign of foreign capital’s impact.
The 10-year yield has ticked lower this month, although U.S. retail sales and consumer-sentiment data showed strength and the Federal Reserve Bank of Atlanta’s GDPNow forecasting service predicted that second-quarter U.S. economic growth would hit 2.5%. Stronger data is typically associated with higher bond yields because faster economic growth tends to push up inflation.
Craig Brothers, a portfolio manager at Bel Air Investment Advisors, still keeps measures of the yield curve prominently displayed on his Bloomberg terminal. But he looks at it less as an indicator of the economy than as a measure of where investors are putting money.
“The bond market had better predictive powers in the past than it does now,” said Mr. Brothers, who manages $3 billion of mostly municipal bonds in Los Angeles.
Other factors play a role, too. The yield curve tends to flatten early in a Federal Reserve tightening cycle, as short-term yields rise in response to prospective rate increases while long-term yields rise more slowly, alongside the gathering pace of economic activity.
About half of the flattening over the past year is because of an increase in the two-year rate, reflecting expectations for Fed rate increases this year. Two-year Treasury debt closed Tuesday at a yield of 0.823%, up from 0.55% a year earlier.
Momentum also plays a role. Bond trading increasingly is driven by hedge funds and principal trading firms using superfast computers. One popular strategy, known as trend following, can lead to a cycle in which bond purchases drive down yields, begetting further purchases that further drive down yields and so on.
Traders say that while this process can push yields down further than economic considerations would seem to demand, the resulting gap is vulnerable to sudden reversals.
"The flattening yield-curve trade is crowded,’’ said Stanley Sun, interest rates strategist at Nomura Securities International in New York.
Another underrated factor: diminished supply of Treasurys as improving U.S. economic health reduces government-funding needs. In April 2016, net issuance of Treasury notes and bonds was negative for the first time since 2008, according to Mr. Slok at Deutsche Bank Securities.
History underlines how difficult it can be to get a handle on the swirling dynamics of this market.
A decade ago, the U.S. was running larger and larger current-account deficits and many government bonds were being purchased by China, which at the time was using U.S. Treasury purchases to help hold down the value of its currency, the yuan, and make its exports more competitive on global markets.
This arrangement fueled fears that the U.S. would be vulnerable to a financing crisis if China began selling its holdings, an argument that bearish bond investors contended would vindicate bets against Treasury debt.
Those concerns came to naught in the financial meltdown of 2008, which instead ignited a powerful rally in prices of safe bonds.
Eight years later, China is selling its Treasurys, but few expect yields to spike imminently, reflecting in part the deflationary concerns driving the economic slowdown in the world’s most-populous nation. Meanwhile private investors have stepped into the breach.
On a net basis, foreign central banks sold $302 billion U.S. Treasury notes and bonds over the 12 months through March this year, according to Deutsche Bank Securities. Foreign private investors bought a net $317 billion.
Don Ellenberger, a fixed-income portfolio manager at Federated Investors, says long-term bond yields will likely remain low as the world struggles to adjust to soft growth, even without a U.S. recession.
“My thought is that we are going to continue to see the curve flatten, but it is going to be a slow grind over a longer period of time,” he said.
Germany’s Rising Incomes Could Finally Mean Good News for Unloved Domestic Stocks
Companies exposed to Germany's domestic economy may outperform the country's export champions as demand rises at home
German stocks exposed to Germany itself have long underperformed local companies that sell outside the country.
That may be about to change, with higher wages and social security payments benefiting companies selling to German consumers just as the country’s export champions hit troubles.
The FTSE Multinational Germany index, which includes companies that record at least 30% of their sales abroad, has almost doubled since the depths of the financial crisis in 2008. The index, which takes into account dividend payments, is up 90% in that time, even after a more recent slowdown in demand from emerging markets.
The FTSE Local Germany index, which tracks companies that record at least 70% of their sales inside the country, has produced a less impressive 30.8% total return over the same period.
That matches Germany’s economic performance over recent years. Even as the eurozone’s sovereign debt crisis raged, demand for German products abroad rose.
But things may be changing. The forces that kept Germany’s export machine pumping — the weak euro, stagnant wages at home and the growing demand of emerging markets — are now all under threat.
“The German economic model was really about making the country very export driven, keeping wage costs down. We’re now playing catchup with demand, you’re finally seeing some wage growth coming in,” said Dhaval Joshi of BCA Research.
ENLARGE
Even as emerging markets have struggled in recent years, the weak euro has buoyed German exporters by making their goods relatively cheaper abroad.
The currency fell from nearly $1.40 in April 2014 to as low as $1.06 last March. But the European Central Bank’s latest stimulus announcements, boosting its bond buying program and cutting interest rates further into negative territory, no longer seem to be putting pressure on the euro.
At the same time, domestic focused stocks are seeing some positive factors at home.
On Friday, the IG Metall trade union reached a deal with employers that will raise pay by 4.8% for 700,000 employees over the next 21 months. Last month, a major union in the chemicals sector demanded a 5% increase for 550,000 workers.
Of course, rising wages are a double edged sword. As well as benefiting from a boost to demand, companies see their labor costs rise too.
But it’s not only rising wages that might work for German consumer stocks. German retirees are receiving a boost from their public pensions, which rose by over 4% this July, the fastest increase in 23 years.
Consumer spending statistics show that Germans are already spending more. Consumer spending increased by 1.9% in 2015, the largest rise in 15 years, according to the country’s statistics office.
Not all analysts are convinced that the fortunes of these the two sectors are about to change around.
The German export machine is still ticking over. The country’s current account surplus hit a record 8.6% of GDP in 2015.
“Based on our forecast for global growth, German exports are likely to accelerate again after a moderate slowdown during the course of 2015,” said Goldman Sachs analysts in a research note published last week. “We also expect no further acceleration in final domestic demand, which we forecast to grow around 2% over the next two years.”
Germany’s frugal consumers aren’t likely to transform into U.K.-style big spenders any time soon. Still, the economic outlook seems much more supportive for Germany’s unloved domestic stocks than its famous exporters.
Canyon Capital discloses updated portfolio positions in 13F filing: new position in SUNE; increased position in YHOO; closed position in FCX, VSLR
Highlights from 2016 Q1 filing as compared to 2015 Q4 filing:
- New positions in: PNC (~0.1 mln shares), SUNE (49,360)
- Increased positions in: YHOO (to ~11.1 mln shares from ~2.3 mln shares)
- Decreased positions in: CZR (to ~3 mln shares from ~5 mln shares), CDK (to ~0.3 mln from ~1.1 mln), CMCS.A (to ~3.3 mln from ~6.9 mln), MDT (to ~0.8 mln from ~1.5 mln), SC (to ~2.3 mln from ~3.7 mln), SCTY (to 49378 from ~1.3 mln)
- Closed positions in: FCX (from ~1.6 mln shares), IBN (from ~5.8 mln), SNOW (from ~0.6 mln), VSLR (from ~7.6 mln), GLBL (from ~0.7 mln), BID (from ~1.2 mln)
WASHINGTON — A bill that would expose Saudi Arabia to legal jeopardy for any role in the Sept. 11 attacks passed the Senate unanimously on Tuesday, bringing Congress closer to a showdown with the White House, which has threatened to veto the legislation.
The Senate’s passage of the bill, which will now be taken up in the House, is another sign of escalating tensions in a relationship between the United States and Saudi Arabia that once received little scrutiny from lawmakers.
Obama administration officials have lobbied against the bill, and the Saudi government has warned that if the legislation passes it might begin selling off up to $750 billion in Treasury securities and other assets in the United States before they might be in danger of being frozen by American courts. Adel al-Jubeir, the Saudi foreign minister, delivered the warning to lawmakers and administration officials while in Washington in March.
Many economists are skeptical that the Saudis would deliver on such a warning, saying that the sell-off would be hard to execute and would do more harm to the kingdom’s economy than to America’s.
Questions about the role Saudi officials might have played in the terror plot have lingered for more than a decade, and families of the Sept. 11 victims have used various lawsuits to try to hold members of the Saudi royal family and charities liable for what they allege is financial support for terrorism. But these moves have been mostly blocked, in part because of a 1976 law that gives foreign nations some immunity from suits in American courts.
But the Senate bill carves out an exception to the law if foreign countries are found culpable for terrorist attacks that kill American citizens inside the United States. If the bill were to pass both houses of Congress and be signed by the president, it could clear a path for the role of the Saudi government to be examined in the Sept. 11 lawsuits.
The administration has warned that any weakening of the sovereign immunity law could put American troops, civilians and corporations at legal risk if other nations decide to retaliate with their own legislation. Josh Earnest, a White House spokesman, said last month that President Obama would veto the bill if it reached his desk in its current form.
The legislation is moving through Congress as the Obama administration is considering whether to declassify a portion of a 2002 congressional inquiry into the Sept. 11 attacks that cited some evidence that Saudi government officials and other Saudi citizens living in the United States had a hand in the terror plot.
Those conclusions have yet to be released publicly, but recently the National Archives posted on its website a separate document that appears to be a glimpse into what is inside the still classified 28 pages of the report.
The document, dated June 6, 2003, is a series of memos written by Sept. 11 Commission staff members compiling numerous possible connections between the hijackers and Saudis inside the United States.
The document was first disclosed publicly by 28pages.org, an advocacy website devoted to declassifying the redacting section of the congressional inquiry.
The Sept. 11 commission, which began its work after the congressional inquiry, examined the Saudi role in the attacks but found “no evidence that the Saudi government as an institution or senior Saudi officials individually funded” Al Qaeda or the 9/11 plotters.
Last month, commission co-chairmen Thomas Kean and Lee Hamilton issued a statement that the 28 pages of the congressional report “were based almost entirely on raw, unvetted material that came to the FBI” — much of it that the Sept. 11 commission ultimately found inconclusive.
“Accusations of complicity in that mass murder from responsible authorities are a grave matter. Such charges should be levied with care,” they wrote.
Bolloré face au gouffre financier de Canal+
Vincent Bolloré précise pour la première fois à Challenges l'étendue des pertes subies par Canal+: 30% de son chiffre d'affaires en France.
Il devait être au Festival de Cannes. Mais après avoir coupé à la hache dans le confortable budget que Canal+ consacrait à la grande kermesse du cinéma, Vincent Bolloré a annulé sa présence. L'homme d'affaires n'a pas voulu prendre le risque de se faire chahuter sur la Croisette. Après des mois de polémique autour de Canal+, l’homme qui a décidé de diffuser les Guignols en crypté, confié le Grand Journal à Maïtena Biraben et laissé partir l’icône du Petit Journal, Yann Barthès, a préféré consacrer son déjeuner du 12 mai à Challenges.
Il semble heureux, Vincent Bolloré, comme d’habitude affable, homme du monde, le verbe facile, l’esprit clair et d’heureuse disposition autour de la table dressée au sommet de l’immeuble qui abrite le siège de Vivendi, avenue de Friedland à Paris. Mais cette belle humeur n’est pas sans nuages. "Ça cogne", confesse-t-il . Pour une bonne partie des médias et de l’opinion publique, l’ex-petit prince du cash flow, le patron et actionnaire de référence du groupe Bolloré, d’Havas et de Vivendi, maison mère de Canal+, porte désormais le visage de fossoyeur du sacro-saint "esprit Canal".
"Un déchaînement médiatique"
Le visage du patron se crispe ainsi instantanément, dès qu’on aborde les départs en série dans le staff de la chaîne cryptée. Le matin même, Manuel Alhuy, le patron du numérique de Canal+, a ajouté son nom à une liste déjà longue. Mais quand Challenges évoque un départ par jour, Bolloré bondit: "23 personnes sont parties depuis que je suis là, dit-il, sur 8.000 salariés du groupe Canal+", parmi lesquels un millier dans la chaîne cryptée elle-même. Il évoque "un déchaînement médiatique". "Cela ne sert à rien d’y répondre, poursuit-il, le procès est perdu d’avance". Il argumente tout de même. Il n’est pas la cause des soucis de Canal+, il en assume les conséquences.
La cause? Canal, "pour ne pas abîmer son image", avait masqué l’érosion de ses abonnés et ses pertes en France, explique-t-il. Des pertes dissimulées derrière les bénéfices de l’international - la Pologne ou l’Afrique -, de la production de cinéma chez StudioCanal ou du bouquet CanalSatellite. Le souci du court-terme, l’obligation de présenter de bons résultats à la maison mère et le caractère purement financier de Vivendi considérée comme une holding financière ont poussé les dirigeants à cacher sous le tapis les signes du déclin. Faut-il accuser l’ancienne direction du groupe Canal+, le PDG Bertrand Méheut que Vincent Bolloré présentait comme son maître voilà encore quelques années, et son directeur général Rodolphe Belmer? Non, "il était l’homme d’un système et personne ne le lui reprochait", répond Stéphane Roussel, le directeur général en charge des opérations, présent à l’entretien.
Des pertes de 30% du chiffre d'affaires
Pour conserver l’équilibre de Canal+ en France, l'ancienne équipe a économisé sur les programmes offerts aux abonnés, explique le patron breton: moins de films, moins de sport. Résultat: un souci "sérieux". En France, les pertes de 258 millions d’euros en 2015 passeront à 400 millions en 2016 "mécaniquement, hors pertes d’abonnés", rappelle Vincent Bolloré. Soit 30% du chiffre d'affaires de 1,5 milliard d'euros réalisé dans l'Hexagone, un chiffre qu'il communique pour la première fois.
Ce constat, bien des observateurs et des salariés peinent à y croire. Il hausse les épaules: "Un tiers du football français et international n’est plus sur Canal+: certains sont dans le déni". Lui veut se concentrer sur les solutions. Il s’attaque aux 400 millions d’euros de déficits prévus. Licencier n’aurait pas de sens: les salaires ne représentent que 10% du chiffre d’affaires. Il faut trouver des économies ailleurs. Il compte sur elles pour la moitié de la somme - "Les économies, c’est simple, quand on accepte de se faire défoncer dans la presse", dit-il - et sur les synergies au sein de Vivendi pour l’autre moitié. "Canal, seul, mourra", menace-t-il.
"Pas une télévision à péage au monde qui fasse du clair"
Tout va se jouer sur la qualité des programmes, dit-il. Des programmes payants. Car la tranche en clair de Canal+ a vécu ses grandes heures. "Il n’y a pas une télévision à péage au monde qui fasse du clair: vous pouvez aller en Roumanie ou en Terre de feu…", lance Bolloré. "On gardera du clair", dit-il. Mais, fini les émissions déconnectées du contenu crypté, type Grand et Petit Journal. Il veut que les programmes en clair incitent à l’abonnement et donnent une idée du contenu.
Est-il inquiet? "En réalité, l’affaire est déjà redressée", assure-t-il. Il n’a pas d’indices. Juste des intuitions. Il va élargir l’éventail des formules et des prix d’abonnements, aujourd’hui à 40 euros… ou rien. Mais tout dépend de l’accord de distribution exclusive envisagé avec BeIn Sports sur lequel l’Autorité de la concurrence tranchera fin mai. "Si on a le droit, nous emprunterons un petit chemin fleuri pour sortir de l’impasse, sinon, il nous faudra passer par la forêt des glaces". Il construirait alors une offre centrée autour de contenus cinéma exclusifs à la manière de la chaîne HBO. Le genre de stratégie qu’on ne met pas en place en 48 heures.
En attendant, il faut corriger les effets désastreux sur l’image de Canal+ et ses abonnés du chamboule tout Bolloré. Le patron breton entreprend une vaste offensive de communication, bien tard.
Apple staffing up on wireless charging experts, including former uBeam engineers
Rumors of wireless charging in the next iPhone are bolstered by recent hires
Last week a former engineer from the much hyped wireless charging startup uBeam left some scathing criticism of the company on his blog. He compared uBeam to the now disgraced startup Theranos, saying that uBeam has avoided any full-fledged public demonstrations because its technology doesn't work as advertised. While it can do some very limited charging over a short distance, he allowed, the basic laws of physics prevent the product from being practical at any commercial level.
While poking around LinkedIn to try and figure out the identity of this blogger, I came across an interesting data point. In the last four months two former uBeam engineers with expertise in wireless charging and ultrasonic technology had been hired by Apple. In fact, public LinkedIn data on Apple's recent hires shows these former uBeam staffers were part of a much broader trend. In the last two years Apple has hired more than a dozen staffers with expertise in wireless charging.
Earlier this year Bloomberg reported that Apple was hoping to add wireless charging to the new iPhone it releases in 2017. And the Bloomberg report specified that Apple wanted to go beyond the minor convenience of a charging mat — which lets you avoid the cable, but doesn't fully free up your device. According to Bloomberg's sources, Apple wants to implement a much more advanced technology that would allow you to walk around a room and have your phone charging the entire time.
That, of course, is the exactly the promise uBeam has been making. And as Bloomberg points out, Apple has filed patents around this idea before. Back in 2010 it floated the notion of using your personal computer as a charging station for various mobile devices in the vicinity. It hoped to work at a distance of about three feet using something called near field magnetic resonance. uBeam, on the other hand, has said that it hopes to use ultrasound waves.
Two other companies, Ossia and Energous, claim to have technology at a distance, but again, neither has submitted those technologies to rigorous public testing or shipped a commercial product that backs up that promise. Ossia's patents focus on using microwaves to wirelessly transmit energy, while Energous claims to use radio frequencies.
There are many approaches to crafting a breakthrough in wireless charging, and also many applications for the expertise Apple has been acquiring. Its smartwatch already works with wireless charging, which could explain the hiring over the last two years. And it has hired lots of engineers who specialize in ultrasound technology to work on haptics and sensing for wearable devices, so the recent pick-ups from uBeam could be aimed at developing technology unrelated to charging. Apple declined to comment for this piece.
Still, it's hard to imagine that this isn't an area Apple is at least investigating. Its most recent earnings release revealed a decline in iPhone sales and its first year-over-year revenue decline in 13 years. It is no doubt eager to find ways to differentiate its next generation of smartphones and tablets from the rest of the market. For Apple, which has over $200 billion in the bank and has been ramping up R&D spending, there is little downside. If it finds a breakthrough, it can use it. If not, it will move on. Companies like Energous, which went public without a revenue stream, and uBeam, which has raised over $20 million in funding over the last five years but still has no commercial product, don't have that option.
*BILL CLINTON SAYS HE WANTS ECONOMIC ROLE