DBRS gives Canadian cannabis industry a non-investment grade


TORONTO — Ratings agency DBRS Ltd. is giving the Canadian cannabis industry a non-investment grade for now, but says that the credit risk profiles of licensed producers could significantly improve in the future as the sector stabilizes.

In a new report, the Toronto-based global credit agency gave the sector as a whole a B rating — one that it usually defines as having very unpredictable cash flow from operations, negative net income and poor size with no purchasing power.

While there has already been significant excitement for the cannabis industry from an equity standpoint, DBRS’ senior vice president of communications and retail, Michael Goldberg, said the credit agency is choosing to stay cautious.

“Because there’s so much uncertainty with respect to competition, the regulatory environment, growth opportunities … credit ratings at this point are non-investment grade,” Goldberg said.

According to the report, DBRS remains cautious because there is no data available on how the sector has performed to this date. The medicinal marijuana market, which only reached $600 million in sales in 2017 in Canada, can not be used to gauge the value of the newly-born wholesale recreational market, which the agency estimates could be worth between $4 billion to $6 billion annually.

The cannabis market is also still quite a small sub-sector of the Canadian economy, the report said, falling significantly behind the tobacco sector and the alcohol sector. According to the firm’s projections, the cannabis industry may follow more in-line with the coffee sector — which generates $6.2 billion annually.

Once data on how consumers and regulators are reacting to the legalization of cannabis becomes available, the firm suggests that its credit rating for the sector could improve. Individual companies such as Tilray Inc. and Canopy Growth Corp., for example, could also separate themselves from the pack and earn higher ratings — a BBB rating would come with a reasonable comparative size in sales and positive net income each quarter — while the sector as a whole maintains a lower grade.

“The companies that are winners — they’re larger, they have more market share, more popular brands, they operate more efficiently,” Goldberg said. “Those companies would definitely be rated higher than the companies that don’t have those attributes.”

There is significant growth potential when it comes to the industry, the report said. This is especially true if Canadian licensed producers turn their attentions overseas and supply cannabis to countries that follow in Canada’s footsteps and legalize the drug either medicinally or recreationally. Some companies have already begun exporting to Germany, the report said, which appears poised to become one of the largest global cannabis markets after legalizing the drug for medicinal use in 2017.

As the market stabilizes, DBRS will monitor whether any licensed producers carve out their market positions and diversify. Brand strength could also play a key role in reversing the agency’s grade.

As of now, there are no bonds for investors to buy, Goldberg said, and so investors should be taking the time to prepare for the future so they can be “better armed to make investment decisions when the opportunity avails itself.”

Cannabis stocks take first major post-legalization tumble


The two major cannabis ETFs tumbled to their worst one-day drop in 2018 on Monday as share prices for most of Canada’s top pot companies plunged by more than 10 per cent each.

The largest U.S. cannabis ETF — the ETFMG Alternative Harvest ETF — fell 9.36 per cent to $33.99. Canada’s Horizons Marijuana Life Sciences ETF saw an even worse drop, plummeting 11.60 per cent to $20.27.

Among the individual cannabis stocks, Aphria Inc. suffered the largest decline on the day — a 13.83 per cent drop to close at $15.77 in Toronto. HEXO and Tilray Inc. weren’t far behind share prices for each company plunged more than 13 per cent.

Although the drop in share prices was steep, Aphria, Canopy Growth Corp., and CannTrust Holdings had worse one-day declines as recently as Sept. 13.

The plunge comes amid concerns that retailers are facing supply shortages in the early days of legalization — some licensed producers have acknowledged they will not reach full capacity for months.

Paul Rosen, CEO of Tidal Royalty, which invests in U.S. cannabis companies, said the plunge shouldn’t be considered out of the ordinary, given the volatility in the sector.

“The markets were just a little grumpy for macro reasons,” said Rosen, who is the former CEO of Cronos Group. “There’s no new bit of information that would’ve justified this sell-off.”

Any hopes that cannabis legalization would bring stability to share prices have so far not been met. On day one of legalization, pot stocks, except for Aphria, fell across the board only to continue to see dips and spikes last week.

“It’s only day four,” Rosen said, suggesting stability may not arrive for several more months.

Rosen said this type of volatility should be considered the norm for investors, who will have to accept five or 10 per cent dips in hopes of larger gains in the future.

“If the volatility or potential volatility is too stressful — there’s too much anxiety — please do not buy stocks,” Rosen said. “Do not.”

As the internet moves to the cloud, Cisco is making cybersecurity a priority


The physical shape of the internet is changing, and as it does, Cisco Systems Inc. is making big investments in cybersecurity to position itself as a leader in the new structure.

Cisco CEO Chuck Robbins was in Toronto for the Fortune Global Forum last week and spoke with the Financial Post about those changes, first among them the migration from localized networks to cloud-based services.

“It’s going to really require us to help customers to re-architect their entire infrastructure over the next five years, which is a massive shift from the networks that they’ve been running for the past decade,” Robbins said.

“The assumption was, all the traffic is flowing back to my private data centre. Now that assumption is completely invalid. In fact, it’s not going to one place, it’s going to 150 different places.”

Under the old paradigm, most companies would maintain their own private networks, with a room full of servers, and limited access to the outside world. Under that system, the predominant method of cybersecurity was a firewall — basically, a system that examines data packets for anything that looks like malware or a virus, and blocks it from entering the system.

But Robbins — whose company acquired Duo Security for US$2.35 billion in August — said that as companies embrace cloud-based services, and internet-connected devices and sensors, the so-called internet of things (IoT), the only effective way to do cybersecurity is by watching the flows of data as you manage the whole network.

“Let me take a run at helping you understand the architecture that we’ve been building in security, which I think three years from now everyone is really going to understand why this is where we have to be,” Robbins said.

“Instead of having a firewall, we’ve built a state machine in the cloud that we feed threat information to — from endpoints, from email, from the network, from cloud applications, from SaaS applications. We take in all this threat intelligence and we correlate all of it in real time, and then all of those devices that are providing the threat intelligence, once we see something new then we dynamically update all those defence systems.”

Right now, he said that Cisco is blocking something like 20 billion threats a day across various networks, because most security threats are based on exploiting old bugs and reusing old malware, trying to sneak into systems that haven’t been patched and updated yet.

Moreover, Robbins said that a company like Cisco is uniquely situated to do this kind of cybersecurity work because they have the expertise with network management, and as a manufacturer of high-performance routers and switches, they can build the kit to do this kind of work within networks.

While in Toronto, Robbins spoke about corporate social responsibility at the Fortune Global Forum, and he announce a partnership with Centre for Addiction and Mental Health to help use Cisco’s expertise to use technology to improve access to mental health services.

Robbins said he thinks some technology companies have been too quiet when it comes to the philanthropic work they do, when it comes to expanding access to the internet and the capabilities that come with it.

“Clearly, you connect people and then you educate people and then you give them opportunity, and hopefully they participate at a higher level after that in this global economic expansion that we’re seeing right now,” he said.

“I think 55 per cent of the world today is actually connected, so there’s still massive new opportunity being created for people who didn’t have it before.”

Robbins talked about the work of Cisco as a sort of essential service, like a utility. He said that these days Cisco has a truck called Network Emergency Response Vehicle (NERV) that acts as a sort of internet first-responder.

“Our guys are the first guys on the ground after a hurricane or a natural disaster. I mean, when we see something coming, we park our teams just out of harm’s way, then as soon as it’s over, they’re in. They’re in because they have to bring up communications infrastructure for first-responders to respond,” Robbins said,

“Lots of businesses are doing these kinds of things, and in the past we have done them because they were the right thing to do, and now the world is looking for us to play more of that role, so we have to first educate the world as to the things we’re already doing, and then probably continue to do more.”

2 of Asias biggest militaries are working on a deal that could give them an edge over China


A meeting between Indian Prime Minister Narendra Modi and Japanese Prime Minister Shinzo Abe later this month may yield more progress on a deal that would allow their armed forces to share military facilities.

The proposed agreement, likely to be discussed during the 13th India-Japan summit in Tokyo on October 28 and October 29, would increase their security cooperation in the Indo-Pacific region by allowing the reciprocal exchange of supplies and logistical support, according to the Deccan Herald.

The proposed deal was first discussed in August, when Japan’s defense minister at the time, Itsunori Onodera, met with India’s defense minister, Nirmala Sitharaman, in New Delhi. It came up again this month during a meeting in Delhi between Modi and Abe’s national-security advisers.

Ships from the Indian Navy, Japan Maritime Self-Defense Force (JMSDF), and the US Navy sail in the Bay of Bengal as part of Exercise Malabar, July 17, 2017.
(US Navy photo by Mass Communication Specialist 3rd Class Cole Schroeder)

Sources with knowledge of preparations for the summit told the Herald that the deal would allow Japan and India to exchange logistical support, including supplies of food, water, billets, petroleum and oil, communications, medical and training services, maintenance and repair services, spare parts, as well as transportation and storage space.

It’s not clear if any agreement would be signed this month, though there are signs India and Japan want to conclude it in the near term, given plans to increase joint military exercises next year and in 2020, according to The Diplomat.

The deal would not commit either country to military action, but it would allow their militaries — both among the most powerful in the world — to access ports and bases run by the other.

For India, that means it would be able to use Japan’s base in Djibouti, which is strategically located at the Horn of Africa between the Suez Canal and the Indian Ocean, overlooking one of the world’s busiest shipping corridors.

In addition to Japanese troops, Djibouti also hosts a major US special-operations outpost at Camp Lemonnier, just a few miles from China’s first overseas military outpost, which opened in 2017 and which US officials have said raises “very significant operational security concerns.”

Camp Lemonnier, a US military base in Djibouti, is strategically located between the Horn of Africa and the Arabian Peninsula.
Google Maps

In turn, Japan would be able to access Indian bases in the Andaman and Nicobar Islands, which sit on important sea lanes west of the Malacca Strait, a major maritime thoroughfare between the Indian and Pacific oceans. (The majority of China’s energy supplies currently flow through the Indian Ocean and the Malacca Strait.)

India has started stationing advanced P-8 Poseidon maritime patrol planes and maritime surveillance drones at the Andaman and Nicobar Islands.

At the summit later this month, Japan is also expected to raise India’s potential purchase of 12 Shinmaywa US-2i search-and-rescue and maritime surveillance planes, which would also be stationed at the islands.

Delhi reached a similar logistical-support deal with France— which has territories in the southern Indian Ocean and a base in Djibouti — earlier this year and with the US in 2016. (India and the US reached another deal on communications and technical exchanges in September.)

Christopher Woody/Google Maps

Further discussion of an India-Japan logistical-support deal comes as those two countries and others seek to ensure freedom of movement in the Indian Ocean and to counter what is seen as growing Chinese influence there.

Japan, which, like India, has territorial disputes with China, has sought to expand its military’s capabilities and reach.

Earlier this month, Japan’s largest warship, the Kaga helicopter carrier, sailed into the port at Colombo, in Sri Lanka — a visit meant to reassure Sri Lanka that Japan would deploy military assets to a part of the world where Chinese influence is growing.

A few days after the Kaga left Colombo, Sri Lanka navy ships were scheduled to conduct exercises with both the Indian and Japanese navies.

Japan has also expanded its security partnerships with countries around the Indian Ocean and pledged billions of dollars for development projects in the region.

The JSMDF submarine Oryu at its launch on October 4, 2018.

Beijing’s activity around the Indian Ocean region is particularly concerning for Delhi.

China’s base in Djibouti, its role in the Pakistani port of Gwadar, its 99-year lease of the Hambantota port in Sri Lanka, and other infrastructure deals with countries in the region have set Delhi on guard, Faisel Pervaiz, a South Asia expert at the geopolitical-intelligence firm Stratfor, told Business Insider earlier this month.

“India’s view is that South Asia’s our neighborhood, and if another rival military power is expanding its presence — whether in Bhutan, whether in the Maldives, whether in Sri Lanka, whether in Nepal — that is a challenge, and that is something that we need to address,” Pervaiz said.

India’s focus is likely to remain on its land borders with rivals China and Pakistan, Pervaiz said, but Delhi has made moves to bolster its position in the Indian Ocean region — a change in focus that has been called “a tectonic shift.”

India’s first-in-class Kalvari submarine during floating at Naval Dockyard in Mumbai in October 2015.
Indian navy

India is working to develop a port at Chabahar on Iran’s southern coast, which would provide access to Central Asia and circumvent existing overland routes through Pakistan to Afghanistan.

India is particularly concerned about Chinese submarine activity in the Indian Ocean and has held anti-submarine-warfare discussions with the US and is seeking to add more subs to its own force.

“For India, the concern now is that although it maintained this kind of regional hegemony by default, that status is beginning to erode, and that extends to the Indian Ocean,” Pervaiz said. “India wants to maintain [its status as] the dominant maritime power in the Indian Ocean, but … as China’s expanding its own presence in the Indian Ocean, this is again becoming another challenge.”

Investors are betting $660 million that companies that ship Viagra and hair loss pills to your door is the future of medicine —but some doctors are worried


The future of medicine could look a lot like a box of generic Viagra showing up on your doorstep.

A wave of startups promising to diagnose and treat erectile dysfunction or hair loss, provide birth control, or straighten your teeth, all without leaving your home, has attracted $662 million in venture funding in the past 12 months, by Business Insider’s calculations.

That’s up from essentially zero in the prior year.

Investors are wagering that consumers will be increasingly willing to shop for healthcare the same way they buy mattresses or fancy wool sneakers online.

The healthcare industry as a whole has been jockeying to stay competitive as companies realize that patients, used to the consumer experience they’re getting from Amazon and Netflix, have higher expectations for their doctor’s visit.

That’s been a driving force behind mega-deals like Amazon’s acquisition of online pharmacy PillPack and CVS Health’s merger with Aetna. On-demand healthcare options like urgent care have gained in popularity too.

“There are other ways of actually reaching these people and having their demand be met by a new healthcare or consumer offering,” Ambar Bhattacharyya, the managing director of Maverick Ventures who leads the firm’s healthcare investments, including a stake in generic Viagra purveyor Hims, told Business Insider.

Olivia Reany/Business Insider

But because these services tend to be focused on a particular condition, it has some doctors worried that patients may be overlooking their overall health. Will the care they’re getting for erectile dysfunction, say, be as comprehensive as a checkup with a primary-care doctor?

“We do have concerns about that,” Dr. Michael Munger, the president of the American Academy of Family Physicians, told Business Insider. “They’re only taking into account one small aspect of the person as a whole.” Some of the services say they can bring care to people who wouldn’t otherwise get any. Men are half as likely to go see a doctor regularly as women are, so finding new ways to reach them, such as through these services, could help close that gap.

“What we’ve found from a positioning standpoint is that men generally are acute-need-focused,” Hims CEO Andrew Dudum said.

How it works

The companies offer a more convenient way of getting healthcare, typically combining an often virtual doctor’s visit with a prescription they ship to you. There’s no wait for an appointment and often no need to leave your house.

A few big factors are enabling their rise. Some of the treatments being offered, such as the erectile-dysfunction drug Viagra, are going generic, making them cheaper for consumers. And the rise of high-deductible insurance plans means people are on the hook for more of their healthcare costs. Legal changes are also making it easier to provide care online, and Medicare might even pay for it too. The companies are building off successes that have happened outside the pharmacy realm, such as in the teeth-straightening market. Four years in, for instance, SmileDirectClub is up to 2,500 employees, with plans to hire another 1,000 by the end of 2018. And earlier this month, the company announced it had raised $380 million in a new funding at a $3.2 billion valuation.

“It’s becoming the soup du jour,” Eric Kim, a managing partner at Goodwater Capital, said. Goodwater has invested in companies like Simple Contacts and at-home diagnostics company EverlyWell.

Kim’s been investing in direct-to-consumer healthcare companies since 2014, and what appeals to him about the business is that, because there isn’t a physical component, the companies can focus on the consumer in a way that a brick-and-mortar doctor’s office can’t. Ultimately, he sees this being a good entry point into healthcare.

“What I think these direct to consumer businesses are good at over time is being the tip of the spear in your care journey,” Kim said.

Andreessen Horowitz partner Vijay Pande said he’s still looking for the right investment in consumer healthcare. Pande invests in biotech and healthcare firms, recently leading a $300 million round for a Medicare Advantage insurance startup. Pande said that people are getting more used to shopping around for their healthcare, particularly when they have high deductibles.

“People are very much incentivized to take charge of their own healthcare,” Pande said. “That’s actually a really important part of healthcare.”

For now, the medications that the startups provide — with the exception of birth control — are paid for in cash, and patients can’t use their insurance. That could limit the conditions that the companies can tackle when it comes to what patients are willing to pay for out of pocket — typically, cheaper generic drugs.

Other conditions might require more than just a conversation with a doctor to get to a diagnosis, like a testing kit or some other physical supplement that still needs to be worked out.

Simple Contacts’ CEO, Joel Wishkovsky, was an early pioneer of online vision screening and is now expanding into birth control. He said that, if anything, the online model provides another choice for consumers, rather than replacing physicians. Patients can still opt to go in person to the doctor if they want, but if they’d rather have a virtual visit that option is now available to them in a way it wasn’t a few years ago.

“I don’t think you’re going to have 100% utilization online,” Wishkovsky told Business Insider. “It’s reasonable to expect that over the next decade you have large chunks of patients doing things online.”

See also:

Oracles Larry Ellison says Amazon’s database is like a semi-autonomous car: ‘You get in, you start driving, you die’


Larry Ellison, Oracle’s executive chairman and chief technology officer, spent much of his time on stage Monday bashing Amazon, as usual, saying the rival company is “about 10, 20 years behind in database technology.”

Oracle’s autonomous database is also still “infinitely” ahead of Amazon’s cloud business — Amazon Web Services—the 74-year-old billionaire founder declared at the Oracle OpenWorld keynote. Oracle’s database, which includes includes automatic provisioning, security, backup, and more, is completely autonomous, Ellison said, while Amazon’s is “semi-autonomous.”

“A semi-autonomous database is like a semi-autonomous car,” Ellison said. “You get in, you start driving, you die.”

Ellison also announced the Oracle Generation 2 Cloud. The Generation 2 cloud is available now for all new customers, and current customers will have their cloud updated to Generation 2 by next year.

“We use the latest machine learning technology and build autonomous robots to go out and search and destroy threats that are inside our cloud,” Ellison said.

Security, apps and more trash talk

The Generation 2 cloud has more privacy for customer data and bots that can stop security threats. With the AWS cloud, Ellison claimed, Amazon can see customers’ data, and customers could also potentially access other customers’ data.

“They have no autonomous features, not available…They’ve got none of that,” Ellison said. “We automatically keep running. In this case, we are infinitely faster and infinitely cheaper.”

Ellison also took time to lampoon Amazon for taking and selling open-source database projects developed by others, projects that are made freely available to the public to use and modify.

It’s not uncommon for Amazon to do this, and it even caused software company Redis Labs to introduce licensing changes that would prevent Amazon and other major cloud companies from making money off of their projects.

In the coming year, Oracle plans to focus on growing its application business, CEO Mark Hurd previously told Business Insider.

Why hurricanes hardly ever hit Europe and the West Coast of the US


You don’t have to live far inland to avoid hurricanes. Just move to Europe or the western coast of the United States. These areas rarely see full-on hurricanes. But that may soon change. As Hurricane Willa strengthens into a Category 5 storm and barrels its way towards the western coast of Mexico, watch the video above to find out why hurricanes rarely hit certain parts of the world.

Following is a transcript of the video.

Europe hasn’t had a hurricane reach its shore in over 50 years. Now don’t get the wrong idea. Hurricane season still brings a hefty dose of wind and rain. But Europe has something that North America doesn’t, when it comes to protection against hurricanes. Location.

Hurricanes usually form off the coast of West Africa, where warm water near the Equator and high humidity create columns of rapidly rising rotating air. It’s the perfect recipe for a storm. Now the more warm, moist air that the system picks up, the stronger it becomes. That’s why a tropical storms can quickly grow into a full on hurricane as it marches across the Atlantic. Now normally hurricanes are propelled on a westward track by the trade winds, caused by the Earth’s rotation. That’s why Europe as well as the West Coast of the US, rarely experience full on hurricanes. But that’s not the whole story.

After all, since the year 2000, remnants of around 30 hurricanes have reached Europe. For comparison, over the same time frame. By the time these remnants make landfall, they’ve went from a hurricane force, to a tropical storm or weaker. And that’s where Europe’s location comes into play. In order for a hurricane to head towards Europe, something crucial has to happen. It has to travel really far North by about 200 miles. Once a storm system reaches 30 degrees north, it encounters the subtropical jet stream. Which moves in the opposite direction of the trade winds. And therefore, blows the storm East But because the storm is now farther North, the waters underneath are colder by up to about five to 10 degrees Celsius. Which means less energy available to feed the storm. And as a result, it starts to die down by the time it’s headed for Europe. Even though it’s no longer a hurricane, it still packs a punch when it hits shore.

In fact, most of these hurricane remnants will combine with other nearby cyclones and weather fronts, that create high winds and rain that mainly hit Ireland and Great Britain. But have been known to reach as far as Greece or even farther in Northern Russia. Typical damages include power outages, flooding, and occasionally casualties. Most recently the remnants of Hurricane Ophelia made landfall in Ireland and Scotland in 2017. About 50,000 households in Northern Ireland lost power. Three deaths were reported and downed trees closed many of the public roads and highways. This was the worst storm that Ireland had seen in 50 years. And it may be a sign of what’s to come.

As global surface temperatures rise, it will also increase the sea surface temperatures in the Northern Atlantic. Which researchers estimate could contribute to an increase in the number of hurricane force storms that reach Europe. Some experts predict that by the end of the 21st century, Europe could experience, on average, 13 powerful storms each year during hurricane season. Compared to the two per year it sees now.

MORGAN STANLEY: There’s an important reason Microsoft would never buy Electronic Arts or Activision to create the Netflix of video games


Microsoft is hunting acquisitions to build out its gaming business, which Morgan Stanley estimates to be worth $40 billion to $45 billion.

But don’t expect it to buy Electronic Arts or Activision.

The economics of buying a big gaming company don’t make much sense for Microsoft, which makes a “large content acquisition less likely than investors believe,” Morgan Stanley analyst Keith Weiss said in a note published Monday

That means Microsoft will probably focus on smaller gaming publishers in its quest to turn Xbox into the Netflix of video games and beat out its biggest competitor, Sony.

“Bottom-line — the economics of driving a strong return from such an acquisition appear challenging,” Weiss wrote. “Microsoft would have to pay for revenue streams which couldn’t be replicated post acquisition.”

Morgan Stanley drew this conclusion after creating a model for what it would take to acquire a hypothetical publisher valued at $39 billion — a midway point between EA’s $31 billion market cap and Activation’s’ $53 billion market cap.

The model showed that Microsoft would have to get 100 million subscribers to its gaming platform in four years in order to justify the expense of a large acquisition. Microsoft would likely struggle to attract such a large userbase, according to the note, since it represents 1/3 of the estimated total console gaming population.

And while adding games like Madden and Call of Duty to its subscription service would likely attract new customers, it probably wouldn’t be enough to offset the cost.

This is in part because an acquisition of that size would require Microsoft to pay a premium of around 25%, according to the note. And whatever company it acquired would likely lose some of its revenue streams once its licensing rights are restricted to Microsoft.

So if Microsoft wants to keeping building out its proprietary gaming content, it will likely keep targeting smaller studios.

The company has already made a play for smaller publishers. In June, it announced a new internal studio called “The Initiative,” as well as the acquisition of four smaller content studios: Ninja Theory, Playground Games, Undead Labs, and Compulsion Games.

And Microsoft is rumored to be in talks to acquire Obsidian Entertainment, according to Kotaku.

The stock markets dead cat bounce is over and the rolling bear market is making a comeback, Morgan Stanley says


The stock market may have bounced back following its sharp drop at the beginning of October, but Morgan Stanley says it’s time to buckle up because the “rolling bear market has unfinished business with the S&P.”

“We think attempts to rebound were more short lived than sustainable,” a Morgan Stanley team led by equity strategist Michael Wilson said in a note sent out to clients on Monday.

“Recent price declines in crowded Growth, Tech, and Discretionary have caused enough portfolio pain that we think most investors are playing with weak hands. We are increasingly thinking a rally into year end will be harder to come by as lower liquidity and concerns on peaking growth weigh on the S&P and an investor base in defense mode.”

The Morgan Stanley team hypothesized earlier this year that a bear market in stocks may have already begun and that earnings growth would deteriorate in the second half of the year as the impact of President Donald Trump’s tax cuts began to fade.

Wilson and his team say they are looking for the S&P 500’s 200-day morning average— which has been tested a handful of times this year, but has held — to finally give way.

Simply put, the 200-day is an indicator traders use to determine the overall trend of the market. The market is in an uptrend as long as it’s above its 200-day, and it’s in a downtrend if it’s below the measure.

So what can that mean for stocks? The benchmark index suffered through a correction, or worse, the last two times it fell below the key technical level.

In August 2015, the S&P 500 plunged 15% amid the fallout from Greece’s default on an IMF loan payment and China’s “Black Monday”, the day the country’s benchmark Shanghai Composite index fell more than 8%. And before that, the S&P 500 plunged into a brief bear market after the US lost its “AAA” rating at the ratings agency Standard & Poors. In both instances, the S&P 500 wouldn’t make new highs for at least five months.

If there is any comfort for investors, it’s that the firm said earlier this year that it doesn’t think the 20% to 40% stock-market plunge that has characterized the last three bear markets will rear its head this time around. Instead, its sees individual stocks and sectors coming under fire. Wilson’s team says to tread carefully in two sectors, tech and consumer discretionary.

“Given the high degree of cyclicality in both Tech and Consumer Discretionary, we think their derating should be more in line with the broader S&P 500, or another 6-8 percent,” they wrote.

“Of course, that begs the question of whether the valuation for the S&P 500 has fallen too far already. We don’t think so.”

Walmart is offering free 2-day shipping on millions more items — and it reveals a key advantage over Amazon


Walmart is beefing up its online offerings with a little help from its friends.

The company announced on Tuesday that it has partnered with “hundreds” of its top sellers on Walmart.com’s third-party marketplace to offer free two-day shipping.

That will result in “millions more” items on Walmart.com being eligible for the perk, which is available on eligible orders over $35, according to the company. The free tw0-day shipping eligibility for these items will start rolling out in November.

As long as a product is marked eligible for free two-day shipping, it doesn’t matter who is selling it — customers still get the perk. For example, if a customer has two items in a cart that equal $35, as long as they’re both eligible for two-day shipping, it doesn’t matter whether the order is coming from a seller or directly from Walmart.

Walmart has also improved the return policy for these select sellers. Starting soon, Walmart will simplify returns, allowing customers to print return slips from its website to attach to boxes and send back to sellers.

Starting in mid-November, Walmart will also send the package on behalf of customers if they bring it to any of Walmart’s stores in the United States. All they have to do is bring it to the Services desk fully packaged for return.

In both cases, return fees will vary depending on the items and the seller.

Adding more functionality to Walmart’s third-party marketplace enables a more seamless shopping experience for customers to shop and not worry about where each item is being shipped from.

It mirrors Amazon‘s Fulfillment by Amazon and Prime Onsite initatives, which ships sellers packages and certifies third-party warehouses to ship Prime packages, respectively.

Walmart’s new program doesn’t take the shipping in-house, but it does offer something that Amazon’s online-only operation can’t match: a network of 4,700 stores that can serve as a dropoff point.