Apple Pay will struggle...

Company News Alert Retailers seen unlikely to warm up to Apple Pay (RTGAM) Tanya Agrawal and Anil D’Silva Apple Inc.’s launch of its own tap-to-pay system using near-field communication in its new iPhones and smartwatches may not be a game changer after all. The success of Apple Pay, unveiled at a gala launch on Tuesday, hinges on the willingness of retailers to use NFC-based payment systems, industry experts said.

  So far the technology, which uses wireless technology to transfer data over short distances, has failed to catch on due to the high costs involved. An NFC-enabled reader costs between $250 and $300. In addition to that, merchants also need to train staff and set up backend IT systems. Apple is betting on the popularity of its iPhones and the convenience and security of its payment system to prompt customers and retailers to make the shift.

The technology will allow iPhone users to pay for anything from office supplies to burgers at the tap of a button, using their American Express Co., Visa Inc. or Mastercard Inc. bank cards. But Apple first needs to swiftly add more retailers such as Wal-Mart Stores Inc. and Best Buy Co. Inc., which recently stopped accepting payments using NFC terminals. “At this point we have no plans to accept Apple Pay,” Best Buy spokesman Jeff Shelman said. U.S. retailers have been notoriously slow when it comes to adopting new payment technology.
They are already lagging in the adoption of payment systems that can read chip-enabled credit and debit cards, a move hastened by a massive data breach at Target Corp. last Christmas. Trying to convince them to move to mobile-based payment terminals can be a big challenge.

 “Apple’s tremendous failure [Tuesday] was in demonstrating anything that was merchant-friendly,” said Tom Noyes, chief executive of Commercesignal Inc., a data and payments company. “There is nothing they showed that wasn’t possible seven years ago. There’s nothing for the merchants,” added Noyes, a former Citigroup Inc. executive. Apple declined to comment.

RIVAL SYSTEMS Apple Pay also faces competition from Merchant Customer Exchange (MCX) – a consortium of retailers including Wal-Mart and Best Buy – which is developing its own mobile payment platform. MCX merchants account for over $1-trillion of consumer spending, or roughly a quarter of the total retail spending in the United States, Morgan Stanley analyst Smittipon Srethapramote wrote in a note to clients. Its members are currently prohibited from accepting all other mobile wallets. Some members have even flipped the switch on their NFC terminals.

 Mobile handset makers included NFC chips in about 300 million smartphones last year, a third of all smartphones shipped. The number of NFC-enabled phones is expected to touch 550 million this year, helped by Apple’s devices and an expanding number of Android gadgets, Gartner analyst Mark Hung estimated. Gartner Research had projected last year that the value of mobile payments by 2017 would be $721-million globally, with only 5 per cent coming from NFC payments.

 “The economics of NFC implementation for the issuing and acquiring communities have been a challenge, resulting in slow adoption of the technology,” industry association Smart Card Alliance said in a report published in November, 2013.

PRESS DIGEST - Wall Street Journal

PRESS DIGEST - Wall Street Journal - Sept 9 (Thomson Reuters)

Sept 9 (Reuters) - The following are the top stories in the Wall Street Journal. Reuters has not verified these stories and does not vouch for their accuracy.

* The Federal Reserve plans to hit the biggest U.S. banks with a costly new requirement aimed at reducing the risk that some financial firms remain "too big to fail" nearly six years after the financial crisis erupted. (http://on.wsj.com/Zfj4OJ)

* European governments approved a new round of economic sanctions against Russia, but the measures won't enter into force for several days to see whether negotiations over the fate of war-torn eastern Ukraine show progress. Some nations, led by Finland, wanted to hold back on implementing the new sanctions while talks are under way, after last week's cease-fire between Kiev, Moscow and pro-Russia rebels. (http://on.wsj.com/1lOU8aO)

* The Secretary of the Department of Veterans Affairs broadly outlined his short-term plan for improving the organization and rehabilitating its image, but included few specific details. (http://on.wsj.com/1w8CXog)

* After three years of closely guarding his strategy for Apple Inc, Chief Executive Tim Cook will show his hand Tuesday, with an ambitious blitz of new products and services that aim to resolve questions about the company's ability to innovate. (http://on.wsj.com/1pJSq5Q)

* General Electric Co's deal to sell its appliance business to Electrolux AB is part of a shift driven by Jeff Immelt to focus the conglomerate on finance and industrial equipment. (http://on.wsj.com/YrP1mZ)

* Home Depot Inc confirmed on Monday that its payment systems were breached at its U.S. and Canadian stores in a security breach that may have stretched back to April. (http://on.wsj.com/1qBeftb)

* BGC Partners Inc is expected to make an unsolicited $675 million all-cash offer for rival GFI Group Inc according to people familiar with the matter. The takeover would bolster BGC, the second-largest broker by market capitalization, at a time of soft trading revenues and often-placid markets. (http://on.wsj.com/1lOHybM)

* The Federal Trade Commission on Monday sued AbbVie Inc and other drug companies over allegations they unlawfully sought to delay generic competition for AbbVie's blockbuster testosterone-replacement drug AndroGel. (http://on.wsj.com/YrPIwx)

* General Mills Inc agreed to buy Annie's Inc for $820 million, betting that a bigger presence in the natural-and-organic foods aisles will energize a business sapped by flagging consumption of breakfast cereals and other traditional fare. (http://on.wsj.com/1qBeQLq)

* The chief executive of Hertz Global Holdings Inc stepped down over the weekend amid disappointing results and accounting problems that had drawn outcries from activist investor Carl Icahn and other shareholders. (http://on.wsj.com/1nHlR9a)

* Brazil's state-run oil company Petroleo Brasileiro SA said it has requested access to the testimony of a jailed former Petrobras executive who has made allegations of a massive kickback scheme at the company. (http://on.wsj.com/1tGbZTY) (Compiled by Rama Venkat Raman in Bangalore)

"Bull markets climb the wall of worry...And that's why I think this bull has room to run"

"Remember, bull markets climb the wall of worry. You know, what's going on in the Mideast, Ukraine—those are the worries. Bull markets top off when no one sees a problem on the horizon, everyone is in, there's no one else to come in," he said. "We are not at that area, and we know the public is still very gingerly putting their toes in this market with disbelief. That does not mark a top of the market. And that's why I think this bull has room to run."

Siegel didn't see the Federal Reserve's expected reduction of asset purchases as much of a headwind, either.

"So, if the Fed eases in March or April instead of late in the summer (of 2015), so it goes to 50 basis points, is that going to end the bull market? I mean, that is still unbelievably low compared to anything historical," he said. "So, the 10-year goes from 2½ to 3—and maybe even 3½—that's still extraordinarily low from any historical (perspective). And that's why, again, stocks have that wind of the interest rates going with them no matter when the Fed starts tightening."

 Jeremy Siegel uber-bullish Wharton professor of finance said that the index, which hit an all-time high on Tuesday, has further to climb.

http://video.cnbc.com/gallery/?video=3000305614

Chris Hyzy said "We're 5 years into a 20-year bull stock market"

As the S&P 500 topped 2,000 for the first time Monday, Chris Hyzy said that the stock market is just five years into a 20-year bull market.

"I know it sounds easy to say," U.S. Trust's chief investment officer said on CNBC's "Halftime Report." "When you really think about this, this is an elongated business cycle. You're going to have fair value through most of it. You're not going to get a lot of overvaluation."

Read More Why S&P 2,000 milestone has Art Cashin unimpressed
Hyzy identified what he saw as key for the continued bull market.

"You're going to have some very big opportunities inter-sector and themes. M&A is running wild. But the key to all of this is the manufacturing in the next decade," he said. "It's already happening. You've got energy independence on its way. The private sector's piercing through whatever restrictions are being put out there, and you've got technological advancement that we haven't seen since the early 1990s.

"That sets us up for an elongated business cycle, which is about five years into a pretty long secular market."

Hyzy, who expects GDP growth of 3 percent to 3.25 percent for the United States this year, said that he liked the financial sector best of all, with selected technology and oil-service plays.

Read MoreMarket bear becomes biggest bull on Wall Street

Europe, he added, resembled Japan at the outset of its 20-year deflationary spiral. With credit growth contracting, weakness in Germany and French bond yields below that of the U.S., European Central Bank President Mario Draghi "has to act at some point, and it's a little too late."

"I would argue that the first movement on QE in Europe is a good thing for low-quality assets," Hyzy said. "You'll get the big rally. And then you'll levitate for a while if growth doesn't get there."

—By CNBC's Bruno J. Navarro.

http://video.cnbc.com/gallery/?video=3000305432