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Recession fears took hold yesterday as short-term Treasuries paid more than long-term notes, a warning sign that investors are rapidly shifting their money into bonds to shield against potential losses they could incur by holding stocks. A brief inversion could be just an anomaly (others have not preceded recessions), but it may depend on how long the condition lasts. Others argue the inversion occurred because of the Fed, which has kept its base short-term rate "too high," while some maintain the yield curve has been distorted by more than $15T worth of foreign bonds that pay negative interest rates. (SA)

 

The retail sector was hammered yesterday by weak guidance from Macy's as department stores continued to lose shoppers to newer forms of retailing. Shares tumbled 13% after the company lowered its full-year earnings outlook and missed profit expectations. Worries were also seen after Cisco's Q2 results, which showed struggles in China amid a continuing trade war. (CNBC)

 

Walmart reassured Wall Street over US consumer spending this morning as the retailer lifted its outlook for domestic full-year sales, but pointed to weakness in its stores abroad. The company, long considered a bellwether for middle-class spending, shrugged off turmoil elsewhere in the retail sector to post a 2.8 per cent rise in like-for-like domestic sales (FT).

 

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.
 



Stocks climbed yesterday after the U.S. decided to delay tariffs on certain Chinese goods. The United States Trade Representative said certain products including clothing and cellphones are being removed from the tariff list based on “health, safety, national security and other factors” The S&P 500 rose 1.48% and the Nasdaq was 1.95% higher. Apple which surged more than 4%. (FT)

 

Yesterday the yield on the 10-year Treasury broke below the 2-year rate, an odd bond market phenomenon that has historically been a reliable indicator for economic recessions. (CNBC)

 

CBS and Viacom have agreed to merge, ending years of talks. The new company will be called ViacomCBS. (WSJ)

Airbnb has settled a lawsuit alleging the site allowed vacation rental owners who use the site to discriminate against customers based on race. (OregonLive)

 

Semiconductor equipment company Edwards Vacuum in Hillsboro is expanding its workforce by 100 employees, to 250. (OregonLive)

 

Troy Reinhart
Northwest Quadrant Wealth Management



Investors are jumping into bonds like they're a hot IPO, with the U.S. yield curve at its flattest level since 2007. The 30-year Treasury rate tumbled as much as 14 basis points on Monday to close in on its record-low of 2.0882% from July 2016, while the 10-year note fell 10 bps to 1.65%, and at one point was just 5 bps more than two-year notes. The pace of the move means 1.318% - the 10-year's all-time low set three years ago - is at risk of being broken, unless the Fed maintains a hawkish stance or if Beijing unveils a stimulus package to counter trade war fallout. (SA)

 

The U.S. budget gap widened further in July as federal spending outpaced revenue collection, bringing the deficit to $867B in the first ten months of the fiscal year, a 27% increase from the same period a year earlier. For the month, the biggest expenditure - Social Security - was $88B followed by Medicare and National Defense, each at $56B. Customs duties, which include tariffs from imports, jumped by 75% to $56.9B YTD.  (FT)

 

U.S. consumer prices rose broadly in July, but the increase in inflation will likely do little to change expectations that the Federal Reserve will cut interest rates again next month amid worsening trade tensions.  The Labor Department said this morning its consumer price index increased 0.3% last month, lifted by gains in the cost of energy products and a range of other goods. The CPI had edged up 0.1% for two straight months. In the 12 months through July inflation is up 1.8%.  (CNBC)

 

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.
 



The boards of CBS and Viacom were negotiating late into Sunday night, trying to hash out a price for their long-awaited all-stock merger, Bloomberg reports. The companies aim to announce a merger by today, although the timing could slip into Tuesday, capping years of failed merger attempts and board infighting. Shari Redstone, whose family investment vehicle National Amusements controls both companies, would become chairman of the combined entity, while Viacom CEO Bob Bakish would lead the firm as CEO. (SA)

 

Investment banks are shedding thousands of jobs, with almost 30,000 losses announced since April as falling interest rates, weak trading volumes and investor pressure to protect profits force the sector to shrink.  Most of the cuts have come in Europe, with Deutsche accounting for more than half the total, but in New York City jobs in commodity and securities trading have also gone.  Bank executives are under pressure from investors to cut costs and protect profits. Since long-term US interest rates began to fall in November, financials have fallen 5 per cent, while the S&P 500 has risen 6 per cent. (FT)

 

Trying to diversify away from ETFs and index funds, BlackRock (the world’s largest asset manager) has scooped up a 30% stake in Authentic Brands Group, parent company of Sports Illustrated, for $875M. Created in 2010, Authentic Brands Group also owns Aeropostale, Juicy Couture, Nine West, Spyder, and Frye. The deal values Authentic at more than $4B including debt and will see BlackRock supplant private-equity firm Leonard Green & Partners as its largest shareholder. (FT)

 

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.



Stocks rose yesterday, erasing most of the steep losses from earlier in the week, as global bond yields rebounded while investors digested better-than-expected trade data out of China. 
 
Uber shares plunged 12% after the ride-hailing service reported second-quarter financial results. The company lost $5.24 billion in the quarter.  Now, Uber must convince investors that it is on a path to profitability with a realistic long-term plan for generating returns for investors
 
In Denmark’s $495 billion mortgage-backed bond market, another milestone was reached as Nordea Bank said it will start offering 20-year fixed-rate mortgage loans that charge no interest.  The development follows an announcement earlier in the week by Jyske Bank, which said it will start issuing 10-year mortgages at a coupon of minus 0.5%. Danes can also now get 30-year mortgages at 0.5%, and Nordea recently adjusted its prospectus to allow for home loans up to 30 years at negative interest rates.
 
Semiconductor materials specialist JSR Micro says it plans to build a $100 million factory in Hillsboro and begin production there sometime next year.  JSR is a Japanese petrochemical company.  JSR didn’t say why it chose Oregon, but Hillsboro is home to Intel’s Ronler Acres campus, Intel’s most advanced production site.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



The S&P 500 and Nasdaq ended narrowly higher yesterday, after spending mostly of the day sharply lower.

The flight to safety sent the yield on the 10-Year Treasury Note — used as a benchmark for mortgage rates and auto loans — falling to a low of 1.595%, the lowest since 2016. The yield on the 30-year Treasury Bond bottomed around 2.12%, near its all-time low reached in 2016. Yields pared some of their declines later in the session but held steady near multiyear lows.

 

Shares of the ride hailing company, Lyft spiked after the company reported second-quarter financial results. The company lost $644 million in the quarter, or $2.23 a share. Revenue soared 72% year-over-year to $867.3 million, and Lyft raised its full-year guidance to between $3.47 billion to $3.5 billion.

 

America's two largest newspaper publishers will merge to combat declining circulation and plunging advertising revenue but will still face pressure to cut costs at hundreds of already cash-strapped publications around the country.  The combination of McLean, Virginia-based Gannett and GateHouse Media, based in Pittsford, New York, will create a conglomerate that will own more than 250 daily newspapers and hundreds of weekly and community papers.  The new company will own the Statesman Journal in Salem, and the Register-Guard in Eugene.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



Stocks rebounded yesterday from their worst day of the year after China’s central bank indicated it plans to keep its currency at a level stronger than some investors had first feared.

 

Shares of Disney traded lower even though the company reported record quarterly revenue as expectations for record-breaking movie profit and higher earnings and sales failed to materialize.  Disney stock has been trading at record highs recently, after the opening of Endgame. The stock is at $141.87, up 29% for the year.

 

Job openings nationwide fell slightly in June but topped 7 million for a record 15th month in a row, reflecting the strongest labor market in decades even as the U.S. faces stiffer economic challenges.  Job openings rose the most in retail and real estate.

 

The iconic clothing retailer founded almost a century ago, Barneys, is filing for Chapter 11 bankruptcy protection but will keep the doors open at its 10-story Madison Avenue store.  The company has secured $75 million in financing to pay employees and vendors as it seeks a buyer.  Barneys stores in Chicago, Las Vegas and Seattle will close along with 12 concept and warehouse locations.  Stores in Beverly Hills, San Francisco and in Boston will remain open.  The picture for most traditional retailers grows worse by the year.  The number of retail store closed in the U.S. this year has already surpassed the total number in 2018.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



Stocks fell sharply yesterday as a trade war between the world’s largest economies intensified with China retaliating against President Donald Trump’s latest move.


The Chinese yuan sank to 7 per US Dollar yesterday which is an all-time-low, with the Chinese central bank blaming the depreciation on market forces and President Trump’s decision last week to extend tariffs on almost all Chinese imports. Mr. Trump responded on Twitter, accusing China of engaging in currency manipulation.

 

The average rate on the popular 30-year fixed mortgage hit 3.70%, the lowest in 3 years. That rate will likely dip even lower, as bond yields continue to fall.  The drop last week meant that 8.2 million 30-year mortgage holders could likely qualify for a refinance and save at least 0.75% off of their current interest rate.  While rates are now incredibly favorable for both refinance and home purchase, consumers still need to shop around for the best rate, and a full one-third of them are not, according to a new survey from Fannie Mae.

 

The yield curve in the bond market is giving the largest waring of an impending recession since 2007.   Rates on 10-year notes sank to 1.74%, close to completely erasing the surge that followed President Donald Trump’s 2016 election. In early trading, they fetched as much as 32 basis points less than three-month bills, the most extreme yield-curve inversion since just before the 2008 crisis.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



US Stocks had their worst week of 2019 last week after investors had to deal with a slew of mixed economic data, and more trade war sabre rattling between the US and China.
 
Warren Buffett’s Berkshire Hathaway said Saturday its second-quarter earnings rose due to unrealized investment gains, while the company’s cash pile grew to a record.  Berkshire reported second-quarter net earnings of $14 billion, from $12 billion, in the year-earlier period.  The 88-year-old Buffett, whose shrewd investments have earned him the nickname “the Oracle of Omaha,” still has plenty of cash on hand for future acquisitions as a way to drive profit. Berkshire held a record $122 billion in cash at the end of the second quarter, up from $114 billion at the end of the first quarter.

 

The University of Michigan said the final reading of its consumer-sentiment index for July was 98.4, up from 98.2 in June.  Recent consumer surveys have pointed to the most favorable personal finance expectations since May 2003, but consumers also have begun to take precautionary measures to increase savings and reduce debt.

 

The economy created a another 164,000 new jobs in July, underscoring the strength of a robust U.S. labor market that’s shown little sign of deterioration.  The unemployment rate was unchanged at 3.7% and remained near a 50-year low. In a good sign, more people entered the labor force in search of work.

 

With Northwest Quadrant Wealth Management, I'm Tyler Simones.



Stocks fell sharply again yesterday, erasing big gains from earlier in the day, after President Donald Trump said the U.S. would impose an additional 10% tariff on another $300 billion of Chinese imports to the U.S.
 
The US economy added 164,000 new jobs in July, underscoring the strength of the US labor market.  The increase was slightly below the forecast of 171,000.  The unemployment rate remained unchanged at 3.7% which is a 50 year low.
 
 American manufacturers grew in July at the slowest pace in three years thanks to festering U.S. trade disputes that have hurt exports and undermined the global economy.  The Institute for Supply Management said its manufacturing index slipped to 51.2% last month from 51.7% in June. That’s the lowest reading since August 2016.


A big quarter at the parent company of KFC, Taco Bell and Pizza Hut. Yum! Brands beat on earnings and revenue thanks to blow-out sales at all three of its big brands. Same-store sales at Taco Bell topped 7%, while KFC was up 6%. They also saw a 2% increase at Pizza Hut, which has been lagging.  The stock rose 4% on the news.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.



>>U.S. stocks sold off yesterday after the Federal Reserve cut interest rates by just 25 basis points, and the selloff gathered steam during Chairman Jerome Powell’s subsequent press conference, where he gave the impression that Wednesday’s cut was a “mid-cycle adjustment to policy” rather than the first in a series of actions to lower interest rates.

 

The Federal Reserve is worried about the economy, but American consumers aren’t. They’re very confident, in fact.  The consumer confidence index jumped to 135 in July from 124 in June.  The index now sits just a touch below an 18-year high of 137.9 set last October.


The nation’s businesses created 156,000 private-sector jobs in July, according to payroll processor ADP, showing that companies are still willing to hire despite stiffer headwinds for the economy such as the ongoing trade spat with China.

 

Pending home sales rose in June, with activity particularly brisk in the western part of the U.S. The National Association of Realtors said pending home sales climbed 2.8%, with gains in each of the four major regions, including a 5.4% jump in the West.  Compared to 12 months ago, sales rose 1.6%, the first year-over-year gain in 17 months.  The Case-Shiller home-price report also released showed moderating gains in prices in key Western cities, and in Seattle’s case, an outright year-over-year decline.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.



Stocks fell yesterday after President Donald Trump renewed his attacks on China, decreasing hope the two largest world economies will reach a trade deal. Investors also braced for a key announcement on U.S. monetary policy.
 
Apple reported earnings for its June quarter yesterday that were above expectations, and the company’s revenue returned to growth after two straight down quarters.  Apple’s guidance was strong and beat analyst expectations, suggesting that demand for Apple products is stabilizing headed into the critical second half of the year.  Apple also declared a cash dividend of $0.77 per share. 
 
Shares of Procter & Gamble jumped 3.8% and hit a record high on better-than-expected quarterly numbers and upbeat forecast for the year. P&G reported adjusted earnings per share of $1.10 on revenue of $17.09 billion, topping estimates.  Procter also sees adjusted earnings per share increasing between 4% and 9% in the fiscal 2020.
 
Home prices continue to rise but at a much slower pace. The 12-month change has been slowing quite a bit in the last few months. Seattle is now the first city “in a number of years” where prices are lower on a year-on-year basis. Las Vegas and Phoenix remain quite strong.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.



U.S. stocks traded in a tight range yesterday as Wall Street tempered its expectations for this week’s trade negotiations between Washington and Beijing and looked ahead to the latest monetary policy decision from the Federal Reserve on Wednesday afternoon.
 
Pfizer the largest drug maker in the world, announced yesterday that it would be spinning off Upjohn, its off-patent branded and generic medicines business, and combining it with generic drug company Mylan.  The all-stock deal will see Pfizer shareholders own 57% of the new business, with Mylan shareholders owning the balance. The new company is expected to have pro forma revenues of as much as $20 billion in 2020.
 
Beyond Meat reported earnings for the fist time as a public company.  The company said that sales quadrupled from the same period a year ago, reporting a second quarter loss of $9.4 million on sales of $67 million.  The stock sold off though after the company announced their plans to sell more stock in a secondary offering.
 
Boeing’s stock fell 1.4% after analysts at credit agencies Standard & Poor’s, Moody’s and Fitch released ratings that gave a cautious outlook on the aerospace giant’s debt due to the prolonged 737 Max crisis.  Additionally, Ryanair CEO Michael O’Leary sounded off on Boeing during his company’s earnings conference call, saying that Ryanair may have to cut jobs if Boeing didn’t get their act together.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.
 



Stocks are at record highs but the market will face its moment of truth in a busy week ahead.  Despite recent signs of a solid U.S. economy, the Federal Reserve is expected to cut short-term interest rates for the first time in over a decade this week. The Federal Open Market Committee kicks off its two-day policy meeting Tuesday, and Chairman Powell will hold a press conference on Wednesday following the policy decision.

 

Starbucks the Seattle based coffee giants stock jumped 8.9% after the company announced earnings and revenue that exceeded expectations. Starbucks posted earnings per share of 78 cents on revenue of $6.82 billion.  Same-store sales, a key metric for restaurants and retailers, rose 6% to beat expectations.

 

Twitter shares jumped 8.9% after the company announced better-than-expected second-quarter earnings and revenue Friday morning. The company made 20 cents per share on $841 million in revenue, topping estimates of earnings per share of 19 cents. Twitter increased ad revenue by 21% year over year.

 

Negotiators for the U.S. and China will face off in Shanghai this coming week in yet another attempt to piece together a trade accord, amid considerably lowered expectations for the kind of sweeping deal that appeared within reach this spring.  People close to the talks say a major breakthrough is unlikely on points that led to negotiations breaking down in early May. That includes the U.S. insistence that China commit to legal changes to protect intellectual property and abandon state subsidies to business, and Beijing’s demands that the U.S. drop all tariffs as a condition for a deal.

 

With Northwest Quadrant Wealth Management, I'm Tyler Simones



Second Quarter GDP is out: Growth decelerated to 2.1% the second quarter, beating low expectations, as tariffs and a global slowdown weighed on the U.S. economy, the Commerce Department reported this morning.  The report comes amid growing concern that the weakening growth hitting much of the world’s economy is spilling over into the U.S. While consumer activity has been strong, manufacturing growth has slumped recently and housing remains a weak spot. (CNBC)

 

Amazon reported second-quarter earnings of $2.6 billion, or $5.22 a share, up from $5.07 a year ago but lower than analysts’ estimates. Revenue was $63.4 billion, up from $52.9 billion a year ago, with the Amazon Web Services cloud-computing business accounting for $8.38 billion of that total.  Amazon had prepped analysts and investors for a decline with a disappointing forecast for second-quarter operating profit, but the total still came up more than $600 million short of analysts’ estimates. (Marketwatch)

 

Shares of Google parent company Alphabet rose more than 9% after the company reported second-quarter earnings that beat estimates after the bell yesterday.  Alphabet said its board of directors approved a repurchase of up to an additional $25 billion shares.  Revenue came in at $38.9 billion for the quarter.  Google now faces even broader threats to its business under the eye of U.S. and foreign antitrust regulators. (WSJ)

 

S&P 500 is up 4, and the NASDAQ is up 2. The MSCI International Index is up 3/10’s of a %.

Oil is up $.90 at $56.78 a barrel.

Gold is up $4.8=70 today at $1428 an ounce. 

 

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.



Comcast offset its declining television business by scooping up more broadband customers, helping the Philadelphia cable giant eclipse expectations for earnings in the second quarter.  The company, which bought Sky as part of a series of media megadeals last year, reported adjusted earnings per share grew to 78 cents a share on sales of $26.9bn. Wall Street analysts were looking for 75 cents a share. Comcast and its rivals have been challenged by a shift away from traditional television and towards alternatives such as Netflix. That trend continued in the quarter: Comcast lost 224,000 video customers in the three months ended June 30. (FT)

 

Ford shares are lower this morning after the automaker reported second-quarter earnings that were short of expectations and issued a disappointing forecast for the year.  Ford, which has slashed thousands of jobs this year, is also investing $11 billion by 2022 in electric and hybrid vehicles to try to keep pace in a changing industry. (SA)

 

Facebook reported better-than-expected earnings and revenue on Wednesday as advertisers continued flocking to the site.  Revenue was $16.9 billion in the quarter, and Daily active users amount to just shy of 1.6 billion. The company also announced a $5 billion settlement with the Federal Trade Commission following the 2018 Cambridge Analytica scandal in which the data of 87 million Facebook users was improperly accessed. (CNBC)

 

S&P 500 is up 4, and the NASDAQ is up 2. The MSCI International Index is up 3/10’s of a %.

Oil is up $.90 at $56.78 a barrel.

Gold is up $4.8=70 today at $1428 an ounce. 

 

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.



As Fed members go into their media "blackout" period, Earnings take center stage and will be the primary catalyst for market movement this week, with a big run of quarterly results led by tech companies and industrial names. Set to report are Amazon, Google, and Facebook as well as Boeing, Caterpillar, United Technologies, and Lockheed Martin.  With 80 companies reporting so far, earnings growth has been 1%, weak, albeit above expectations.  (Refinitiv)


The Lion King became Disney's fifth blockbuster of 2019 over the weekend, with the digital remake grossing an eye-popping $185M at the domestic box office, and collecting $531M so far (after opening early in China). Another record on Sunday saw Marvel's Avengers: Endgame become the highest-grossing film of all time, topping 2009's Avatar with $2.79B. Disney has now earned more than $18.2B at the global box office from Marvel movies since buying the company in 2009. (SA)


Equifax is nearing an agreement to pay $700M to settle privacy claims stemming from a 2017 data breach that exposed Social Security numbers and other sensitive personal information of nearly 150M people, WSJ reports. The payments would go to the Federal Trade Commission, the Consumer Financial Protection Bureau and most states, resolving a nationwide consumer class action lawsuit. The hack forced big changes at Equifax, leading to the resignation of its long-serving CEO, and prompting intense scrutiny from lawmakers.  (WSJ)

 

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.



Stock valuations in developed-international markets are quite a bit lower than those in the United States. However, peel back the onion and you will find that the MSCI EAFE Index--the benchmark for developed international equities primarily composed of European and Japanese stocks--actually appears closer to fairly valued than underpriced due to different sector and profitability profiles. (LPL Research)

 

Morgan Stanley’s rich clients pulled about $10 billion of outflows from their accounts last quarter the likely culprit: Under the Trump administration’s 2017 tax reform, the deduction for state income, sales and property taxes was capped at $10,000. That has widely been perceived as causing higher taxes for people living in New York, New Jersey and California. (CNBC)

 

Anheuser-Busch InBev is contemplating selling off business units in South Korea, Australia and Central America. AB InBev called off the initial public offering of its Asian business on Friday (Wall Street Journal)

 

The House passed a bill to hike the federal minimum wage to $15 per hour. It would index further hikes to median wage growth. It would also phase out lower minimum wage paid to tipped workers. (CNBC)

 

With Northwest Quadrant Wealth Management on Troy Reinhart.



Stocks dipped yesterday as investors sift through a slew of 2nd quarter earnings reports.


Amazon’s 2019 Prime Day was its biggest sales event yet.  The company said it sold more than 175 million items over the course of the event, up from 100 million items last year.  Amazon-branded electronics including the Echo Dot, Fire Stick, and other Alexa-enabled devices were among the top-sellers.  Meanwhile, third-party sales volume topped $2 billion during this year’s Prime Day, up from $1.5 billion last year.


Construction of new houses fell slightly in June and permits sank to the lowest level in two years, suggesting a sluggish U.S. housing market has failed to gain much momentum from lower mortgage rates.  Housing starts slipped 0.9% to an annual pace of 1.25 million last month. That’s how many homes would be built in 2019 if construction took place at same rate over the entire year as it did in June.


Shares of railroad giant CSX fell sharply after the company reported earnings that missed expectations.  The CEO of the company said on the earnings call that the US economy was the most puzzling he has experience in his career.


Shares of United Airlines are higher after the company reported revenue and earnings that topped expectations.  The company also increased their stock buyback program to $3 Billion
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



Stocks slipped from record highs yesterday after President Trump said that we have a long way to go on trade talks with China.

Four of the major US Banks JP Morgan, Goldman Sachs, Wells Fargo, and Bank of America all reported earnings results that beat analysts expectations.  On the earnings conference calls all of the companies mentioned the trade war and the Fed cutting interest rates as reasons for declining revenues later this year.

Sales at U.S. retailers rose solidly in June for the fourth month in a row, pointing to a strong rebound in consumer spending in the second quarter that suggests the economy is not as fragile as the Federal Reserve apparently believes.  Retail sales increased 0.4% last month, the government said Tuesday. Economists polled by MarketWatch expected a 0.1% gain.

Oregon’s unemployment rate has been at or near a record low for almost three years. That trend continued in June, according to the latest figures released by the state.  The unemployment rate in Oregon for June was 4.1%, according to economists with the Oregon Employment Department. The rate for May was 4.2%. The record low, for data going back to 1976, was 4% in May 2018.  For 32 months, or since November 2016, Oregon’s unemployment rate has been between 4% and 4.4%.

With Northwest Quadrant Wealth Management, I'm Tyler Simones.



Back to school time is the second busiest shopping period of the year and is projected to be flat compared to a year-ago. Spending for back-to-school clothing, school supplies and electronics for children in grades K-12 is expected to reach $27.8 billion this year. (Deloitte survey)

 

Shares of Helen of Troy, owners of Revlon, Vicks and Hydro Flask is raising their forward earnings guidance. The company also beat earnings and revenue expectations in announcing quarterly results. (CNBC)

 

President Trump is considering firing Commerce Secretary of Commerce Wilbur Ross. (NBC News) 

 

Second quarter earnings season gets rolling this week with nearly 60 S&P 500 Index companies reporting results. Consensus estimates are calling for a slight year-over-year decline in S&P 500 earnings amid the downshift in U.S. and international economic growth, tariffs, and ongoing trade tensions. (FactSet)

 

More than 1 million children were victims of identity theft or fraud in 2017, according to a report from Javelin Strategy & Research. Two-thirds of those affected were age 7 or younger.

 

With Northwest Quadrant Wealth Management on Troy Reinhart.
 



After more dovish communications from Federal Reserve officials sent U.S. stocks to record highs last week, second-quarter corporate earnings results that start this week will pose the next test for investors.
 
China's gross domestic product rose 6.2% in the second quarter from a year earlier, the slowest pace in at least 27 years.  The GDP figure comes as the world’s second largest economy remains locked in a trade war with the U.S.
 
Amazon kicked off its fourth annual blockbuster Prime Day sale at midnight, promising “more than one million deals globally” for products from Alexa-enabled devices to goods from many of the company’s third-party sellers.
 
China's trade with the United States plunged last month amid a tariff war.  Imports of US goods fell 32% over the same period last year, while exports to the American market fell 8%.  China's trade surplus with the US widened by 3%, giving critics ammunition to demand Washington take a hard line with Beijing.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.
 



Markets have a July rate cut from the Federal Reserve as the base case following Chair Jerome Powell’s two-day testimony to Congress. Two regional Fed governors are pushing back, with Atlanta’s Raphael Bostic and Richmond’s Thomas Barkin disputing the need for stimulus right now. Each of them cited the Dallas Fed’s measure of inflation which has come in close to 2% in recent months. As neither of them are voting on the FOMC this year, their arguments could well get lost as Powell gets on with being the world’s central banker. (Bloomberg)

 

Shares of pharmacy benefit managers and other healthcare players soared on Thursday in reaction to the administration's reversal of its proposed overhaul of rebates collected by the drug middlemen. At this juncture, the administration is moving forward with its plan to tie Medicare reimbursement for drugs to the lowest prices paid elsewhere. The news came days after a federal judge dealt a blow to the White House by striking down a rule that would have forced pharmaceutical companies to disclose the list price of their drugs in TV ads. (SA)

 

Crude prices are headed for their biggest weekly gain in three as simmering Middle East tensions, shrinking U.S. crude inventories and Tropical Storm Barry in the Gulf of Mexico threaten the supply outlook. Despite the developments and recent rollover of an OPEC-led output cut, the IEA is forecasting another oil glut in 2020. "This surplus adds to the huge stock builds seen in the second half of 2018," the agency declared, adding that "market tightness is not an issue for the time being" but predicting growth of 1.4M barrels per day next year (from 1.2M bpd in 2019). (WSJ)

 

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.



France’s Senate has approved a tax on the revenues of tech giants like Google, Amazon, Facebook and Apple, defying a warning from President Donald Trump's administration that it “unfairly targets American companies.” The administration has launched an investigation into the 3 per cent digital services tax, which is to be imposed on digital businesses with revenues exceeding €750m globally and €25m in France. The unilateral move by Paris could result in tariffs on French wine or cars though both sides would likely seek a negotiated settlement first.  The US has lobbied aggressively to block taxes on tech companies’ revenues. But France and other EU countries have pursued national-level duties after a pan-Europe effort stalled earlier this year. (FT)
 
The last Volkswagen Beetle has rolled off the assembly line in Mexico's central Puebla state, serenaded by a mariachi band and surrounded by proud factory workers. It marks the end of the road for an iconic car that began in Germany in the 1940s through the hippie counterculture in the 1960s, but failed to navigate a current swerve in consumer tastes toward SUVs. The Puebla factory, which already produces VW's Tiguan SUV, will make the Tarek SUV in place of the "bug" starting in late 2020. (SA)
 
U.S. underlying consumer prices increased by the most in nearly 1-1/2 years in June amid solid gains in the costs of a range of goods and services, but will probably not change expectations the Federal Reserve will cut interest rates this month.  The Labor Department said on Thursday its consumer price index excluding the volatile food and energy components rose 0.3% last month.  There were also increases in the cost of healthcare and rents. In the 12 months through June, the core CPI climbed 2.1%
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.



Jay Powell, the chairman of the Federal Reserve, has cemented the case for the US central bank to cut interest rates based on mounting risks to the US economic outlook, in dovish testimony to Congress that could fuel expectations of a looming monetary easing.  Despite a strong jobs report for the month of June and last month’s new truce in the trade war between the US and China, Mr Powell said “uncertainties about the outlook have increased in recent months”, particularly internationally. (FT)

 

Something interesting is happening in the media landscape, where Netflix is becoming the incumbent, and the challengers are established firms that have been around for nearly a century. Disney, Warner Media, and NBCUniversal are all launching direct-to-consumer streaming services by the first quarter of 2020, and the race is heating up over content. The latest move has seen Warner Media pull Friends off Netflix in 2020 when it debuts its service, HBO MAX, and comes shortly after Netflix lost The Office to NBC Universal coming 2021. (SA)

 

After achieving record deliveries in the second quarter, Tesla is getting ready to increase EV production at its factory in Fremont, California. Tesla has said it plans to produce "significantly" more than the 360,000 to 400,000 vehicles expected to be delivered in 2019, easing concerns over demand for the company's electric cars.


Elon Musk’s automaker impressed Wall Street with record second quarter sales numbers yet analysts remain cautious, focusing instead on the company’s upcoming earnings report. Tesla is expected to report second-quarter earnings on Aug. 7. (CNBC)

 

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.


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