Security has been the theme this week. Our President outlined it on Wednesday night with an action plan for how to deal with the Islamic State in Iraq & Syria (ISIS) to prevent further spread of terror that threatens the globe and has become a homeland security issue. There are no quick and easy answers to this threat, but the United States is back on the offensive in pursuit of defeating terrorist cells. Security has been an issue for months along the Ukrainian border. New sanctions from Europe and the US directed at Russia continue to show that the issue is not going away amicably.
Apple announced a plan to make transactions more secure. Along with the multitude of product offerings announced this week, which include a new iPhone and the unveiling of the Apple Watch, the biggest release in our minds was Apple’s new payment service. In collaboration with Visa, MasterCard and American Express, Apple is rolling out a digital payment structure that is expected to be more secure than anything currently in circulation. Apple has embraced a technology known as Near Field Communication (NFC), for secure electronic point of sale. It uses digitals tokens. Apple’s Tokenization removes the actual credit card number and replaces it with a randomly generated number. That number, or token, can be configured to expire after one purchase or made specific to a certain transaction, making it a useless target for hackers or fraudsters. Taking it further, tokenization removes a huge burden from retailers, since they never see a person’s actual credit card information and it never enters the retailer’s internal system. It’s no surprise that Target and Home Depot were among 2,000 retailers to embrace Apple Pay. Apple is focused on transaction security.
Palo Alto Networks is developing cutting edge cyber security software solutions to combat the growing risk of hacking and theft. The company announced this week that its revenues grew over 50% year-over-year. Management has visibility for 40% revenue growth for the foreseeable future. Companies are making substantial investments in cyber security, and Palo Alto, which essentially created the next-generation firewall, is taking market share. The stock is up nearly 80% this year. Palo Alto Networks is making our world more secure.
Our focus in Walnut Creek is your financial security and well-being. We adjust investment strategies dynamically to account for anything that comes our way and might impact your portfolio. We take this responsibility very seriously.
The Fed meets again next week, which could prove to be a pivot point for the Market and the US economy. We’re all over it.
We’ll be back dark and early on Monday.
By: Mike Frazier