MARKET ROUNDUP
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-$1.12 to $55.26
The envelope from JPMorgan Chase (JPM, Weiss Ratings: A) showed up at our house last week. I wasn’t sure why at first, since my credit card expiration date was still a little ways off.
Then I opened it, and there it was — my first “chip” card. If you’re not familiar with these things, you will be soon. They look like regular credit cards except for one thing: They have a computer chip embedded in them that looks like a silver-colored square with a handful of black lines running through it. It’s roughly the size of a fingernail.
Chip cards are designed to be much more secure than standard magnetic stripe cards.
Instead of swiping your card down the side of a standard card reader, you typically insert your card into the front of one. It stays there while you enter your PIN number or sign, then you remove it when the transaction is completed.
Chip cards are designed to be much more secure than standard magnetic stripe cards. The chip produces a special code every time you buy something with your card. That makes it much more difficult for scammers to steal your information and create a duplicate card.
I’ve traveled throughout Europe for years now, and over there, chip cards are ubiquitous. Here in the U.S., card issuers, banks and merchants have been arguing about the costs, logistics and benefits of chip cards for years. That’s why it has taken so long for us to catch up with the rest of the world!
But change is now coming, and coming fast. The Wall Street Journal reports that 575 million chip cards will hit our mailboxes by the end of 2015. That would be equivalent to about three-quarters of the country’s credit cards outstanding, and 4 in 10 of debit cards.
Larger retailers like Wal-Mart Stores (WMT, Weiss Ratings: B+), and those who have dealt with huge data breaches, like Target (TGT, Weiss Ratings: C), have already upgraded to new readers that can handle chip cards. And large banks like Chase and Citigroup (C, Weiss Ratings: B) are rapidly changing their card portfolios over.
Bottom line: If you don’t already have a chip card, you probably will soon! And frankly, the increased security couldn’t come at a better time.
“If you don’t already have a chip card, you probably will soon!”
Just a few weeks ago, as I was trying to enjoy some pool time with my kids at an Orlando resort, my iPhone started lighting up. The culprit: Calls, texts and emails from Chase, noting fraudulent activity. Someone had gotten a hold of my debit card number and tried to spend more than $1,000 at a Colorado Nordstrom store.
I haven’t set foot in that state in years, or a Nordstrom store in months. And to Chase’s credit, they flagged and denied the charge. But they had to cancel my debit card immediately, leaving me with no way to get extra cash for the remainder of the weekend trip. This wasn’t the first time my wife or I have been dinged, either, and it’s a pain in the you-know-what to deal with!
So how about you? Have you been forced to jump through hoops with your credit or debit cards thanks to fraudulent activity? Have you received a chip card this year, and do you think that will make a difference? What other steps have you taken or would you recommend others take to cut down on rip offs? Let me know over at the Money and Markets website!
Our Readers Speak
In light of the escalating conflicts in the Middle East, you had many different responses to the resulting ethical and moral questions they raise.
Reader Lawrence said: “I’m all in for investing in the war machines that are needed in Europe right now. It is better to sell them our war machines rather then we have to use those machines in war.”
And Reader Shar said: “If there’s one sure bet in our world, it’s war, and for that reason I’ve been invested in the PowerShares Aerospace & Defense Portfolio (PPA) and Lockheed Martin (LMT, Weiss Ratings: B+) for years. I sold Boeing (BA, Weiss Ratings: B+) and Orbital ATK (OA, Weiss Ratings: Not rated) last year when they ran into trouble, have taken LMT profits twice, and might be interested in United Technologies (UTX, Weiss Ratings: A-) after this report.
“I have no problem investing like this as I need to provide for my family, not to mention investing in this manner is simply the American way. Years ago I tried to control my investments according to my ethics but business has none, so it became impossible to trace every penny of their investments.”
On the other hand, Reader David said: “The morbid concept of making money on weapons or war is what is wrong with this world. It is no better than profiting from the people that lost their houses to the corrupt banking system. The moral values of America are corrupted and there is a cold place in Hell for those that do this.”
Reader Jerry added the following to that thread: “Sure they’re making money, but that doesn’t mean I need to support it with my investment dollars. Just like the tobacco companies and casino operators that make money from our weaknesses, I don’t need to participate in that game. There are plenty of other companies making good money doing much more benign work. That’s where I choose to invest.”
Thanks for all your input. I certainly don’t “glorify” investing in companies that make weapons of war. My column merely pointed out the cold, hard truth: We’re seeing more conflicts in the Middle East, and there are companies that are being impacted by it.
Some investors believe as Lawrence does: Namely, that funding the companies who provide better weapons to our allies will keep war from coming to our doorstep. Others believe as David does: That no defense company deserves his dollars, regardless of who they sell to.
My goal is simply to keep you informed about important trends, and the impacts those trends have. It’s your personal choice what to do with that information. With that in mind, please do feel free to add to the discussion over at the Money and Markets website.
Other Developments of the Day
Tensions continue to rise in the Middle East, with the U.S. Navy sending the aircraft carrier USS Theodore Roosevelt to the Yemeni theater from its previous station in the Persian Gulf. That raises our presence there to nine ships. The Pentagon says it’s trying to prevent Iran from shipping weapons to Houthi rebels, and to keep shipping lanes in the area safe.More earnings are flooding the tape, with Big Blue among the biggest reporters in the last 24 hours. International Business Machines (IBM, Weiss Ratings: C+) reported earnings per share of $2.91 excluding items, beating the average estimate of $2.81.
But the stronger U.S. dollar took the shine off of sales, which came in at a lower-than-expected $19.59 billion. Chemicals firm DuPont (DD, Weiss Ratings: B+) also cited the rising dollar as a headwind — saying it would lop 80 cents per share off its 2015 bottom line.
Chinese companies are starting to default more widely on domestic and foreign currency-denominated bonds. The power company supplier Baoding Tianwei Group was the latest to default overnight, following property developer Kaisa Group Holdings yesterday.
We’ll likely see billions of dollars worth of default in industries beset by oversupply, weak pricing, and lackluster customer demand. But so far, the financial spillover into international markets is limited.
Blue Bell Creameries is yanking all of its ice cream products from store shelves following the sickening and deaths of a handful of adults in Kansas and Texas. They tested positive for the bacteria listeria, which reportedly came from Blue Bell’s products.
So what do you think of the latest crop of earnings? Is the dollar a real problem for Corporate America or just an excuse for poor performance? What about all these Chinese defaults — should we be concerned as investors here? Use the website to share your opinion.
Until next time,
Mike Larson
The post Chip Cards Coming to America — Slowly! What You Need to Know! appeared first on Money and Markets - Financial Advice | Financial Investment Newsletter.