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Business News


Good Jobs Number


US stocks are higher building on the Dow’s record close Wednesday after the Fed decided not to change its guidance for keeping interest rates low. (CNBC)

Last week the financial media was casting, what we thought was unwarranted, doom and gloom as the weekly jobless claims number took a small jump upward. This week we were proved right as the weekly jobless claims fell to 280,000, its lowest level since May 2007.  (Fox Business News)

ConAgra Foods, with the Hunt’s, Swiss Miss and Hebrew National brands, reported quarterly profits down almost 17% from last year.  Despite the decline the company sees improving business fundamentals. (Business Wire)

Two-thirds of workers recently surveyed by CareerBuilder said they don’t aspire to leadership or management positions. Only 7% said they’re aiming for senior or C-level management. Reasons for this lack of career drive is that a majority of respondents say they’re satisfied with their current job. Others say they don’t want to sacrifice their work life balance for anything more taxing. Seventeen percent say they don’t have the necessary education to move up in their careers. (The Fiscal Times)

The US dollar has been climbing for 10 weeks, marking its longest rally in 17 years, spurred by expectations for rising interest rates next year and easing by other major central banks. A strengthening dollar is good for the consumer making imports cheaper, but could be bad for jobs as the price of our exports climb. (Wall Street Journal)
 

Lots of Earnings News


US stocks are little changed as we await the Fed’s updated policy statement and Fed Chairman Janet Yellen’s afternoon pres conference. (CNBC)

Once a tech icon, Sony, warned of a much-deeper-than-expected loss and said it would not pay a dividend this business year for the first time since 1958.  The company is now predicting a $2.15 billion net loss for the year. (Reuters)

Microsoft increased their dividend by 11% to 31 cents per share, which is in line with the software company's revenue growth last year and half of last year's 22% increase. Microsoft has a bulging shack of cash, which increased 11% over the past 12 months to $86 billion.   (Reuters)

General Mills the maker of Cheerios, GoGurt and Toaster Strudel, says quarterly profits fell 13% on sales of $4.27 billion. The company says North American manufacturing and distribution streamlining are expected to generate $100 million in cost savings by 2017. Plant shutdowns and worker firings are the most likely actions. (Yahoo Finance)

FedEx reported a 24% increase in quarterly profit as the world's No. 2 package delivery company benefited from higher volumes in both its express and ground businesses. Revenue increased to $11.7 billion from $11.02 billion a year ago. (CNBC)

Inflation in Check at Producer Level


US stocks are lower ahead of today’s start to the Fed's two-day meeting. Investors expect a policy statement language tweak, which could signal when interest rate hikes might begin. (CNBC)

The August producer price index (PPI) is unchanged, following a 0.1% increase in July. The ex-food and energy rate increased 0.1% after being up 0.2% in July. (Associated Press)

They must be listening to Financial Focus Radio! The California Public Employees' Retirement System, the nation's largest pension fund, is dumping its hedge fund program to reduce costs and complexity in its investment portfolio. The pension fund will liquidate 24 hedge funds and six hedge fund-of-funds that are part of its Absolute Return Strategies (ARS) program. The investments are valued about $4 billion. (CNBC)

Job openings in July held close to a more than 13-year high, showing companies in the U.S. will probably pick up the pace of hiring. The number of positions waiting to be filled fell by 2,000 to 4.67 million in July from 4.68 million in the month before, which was the highest since February 2001, the Labor Department reported. Some 2.52 million people quit their jobs in July, the highest since June 2008 and up from 2.48 million the prior month. (Bloomberg)

Kids pay attention. A high school graduate will earn almost $500,000 more than a dropout over the course of a lifetime, and a university graduate will earn some $800,000 more than a college dropout. (US Chamber)

Nearly half of the people who exploit the finances of elderly Oregonians are members of their own families. Financial exploitation allegations in Oregon increased by 18% between 2012 and 2013. The study revealed that bank employees and family members of victims were the most likely to report financial exploitation. (Oregon Live)

Oil Continues Decline


A new survey from the National Foundation for Credit Counseling found 1 in 5 people could not make ends meet without the use of credit. Another 22% of respondents said they would have to make significant lifestyle changes if asked to live on cash only. “Many people have built a lifestyle their income won't support and rely on credit to supplement their income," said Gail Cunningham, spokeswoman for the NFCC, in an email. "This is a recipe for disaster, as the party has to end at some point, and when that day comes, it will arrive in the form of an unmanageable debt load." (Bankrate.com)

The world’s largest bond mutual fund, Pimco Total Return Fund suffered its 16th month of outflows.  Investors pulled $3.9 billion from the fund in August, which brings the Total Return Fund's net cash withdrawals to almost $70 billion since May 2013.  The run on the fund has come as returns have suffered.   Outflows can bring even more poor performance to those investors who remain. (Reuters)

US regulators have issued rules for banks to hold enough easy-to-sell assets to keep them afloat during a financial crisis. The Federal Reserve says big banks will need to hold a total of about $2.5 trillion in highly liquid assets by 2017.  Currently banks hold about $100 billion short of that. (Associated Press)

Around 1577 Expatriate Americans have renounced their US citizenship during the first half of the year, a record pace, a lot of them because of increasingly onerous tax-filing requirements. The majority of expats are based in Europe, but growing numbers live in the Asian financial hubs of Tokyo, Singapore and Hong Kong. Around 6.32 million Americans (excluding military) live abroad. (CNBC)
 

Retail Sales Up .... No Inflationary Pressure


August retail sales increased 0.6%.  This is a bounce back from a weak performance in July. August import and export prices were down 0.9%, showing no inflationary pressure. (Associated Press)

Darden Restaurants reported a quarterly loss of $19.3 million as same-restaurant sales fell 1.3% at its Olive Garden chain, which contributes about two-thirds to profits. The company has been reinventing itself over the last year as activist investors push for more profitability. (Reuters)

The over 124 million single Americans make up more than half of the adult population for the first time since figures were compiled. In 1976, it was 37.4% and has been trending upward since. Over 50% of those single are 16 years or older. (Bloomberg)

The good news is that Americans are saving more for college, but the average amount wouldn't come close to paying the bill.  The average college savings is now worth about $20,671. The average cost for a four-year public school, including room and board, is about $18,391 a year. (Associated Press)

Millennials are shying away from credit cards with than six in 10 people ages 18 to 29 not having even one in their wallets.  But their determination to say no to credit cards can shoot them in the foot because they're missing out on the chance to build their credit scores. (USA Today)

Oil and Gold Take a Beating


World stock markets are lower after President Barack Obama put America back on a war footing. (NY Times)

Troubled electronics icon, RadioShack reported its 10th straight quarterly loss and is seeking to raise capital. The company posted a loss of $137.4 million as sales fell 22%. (Reuters)

US foreclosure activity jumped 7% in August, up for the second consecutive month.  Banks have started the foreclosre process on more properties and scheduled more housing auctions, says RealtyTrac. Foreclosure activity is down 9% from a year ago.

McDonald's may be looking to serve McBrunch. The fast-food giant has filed a federal trademark registration for the term. This comes as their same store sales have declined for four straight months.  (USA Today)

With 104 days till Christmas Wal-Mart has released its top 20 toy list.  Making the list was rebooted classic brands, such as Mattel's Barbie Glam Camper and Hot Wheels Street Remote Control Flying Car. (CNBC)

Get More For Less


US stocks are near the flat line in early trading, after the S&P 500 and Nasdaq posted their biggest drops in over a month. The S&P 500 is down 5 of the last 6 trading sessions. (CNBC)

McDonald’s same store sales fell 3.7% in August as its U.S. slump continued for the fourth straight month.

McDonald’s, the world’s largest restaurant chain, posted the worst same-store sales decline in more than a decade, hurt by sluggish demand in the U.S. and a health scare involving a Chinese supplier. (Bloomberg)

Total mortgage applications fell 7.2% last week according to the Mortgage Bankers Association. The index is now at its lowest level since December of 2000. Applications to refinance mortgages decreased 11% and applications to purchase a home fell 3%. Purchase applications are now 12% below where they were one year ago.  In an interesting twist the interest rate for 30-year fixed-rate mortgage with conforming loan balances ($417,000 or less) is 4.27%, while a 30-year fixed-rate mortgage with jumbo loan balances (greater than $417,000), is 4.15%. Historically, jumbo loans carry higher interest rates, but lenders today are charging borrowers more for loans backed by Fannie Mae and Freddie Mac (conforming loans) to make up for higher fees imposed by the government-sponsored entities and for higher risk. These are called credit "overlays."

Powdr Corp., owner of Mt. Bachelor Ski Resort, has agreed to pay a $17.5 million bond to maintain access to the terrain of its Park City Resort.  The company had long rented access to the resort terrain for $155,000 a year, but in 2011 that lease lapsed. (CNBC)
 

Waiting on Apple


US stocks look to move higher in early trading, ahead of today’s big Apple product announcements. The S&P 500 has lost ground in four of the past five sessions. (CNBC)

Annie’s, the maker of that organic bunny mac-n-cheese, is being purchased by General Mills for about $820 million. That’s a 37% premium over Monday’s closing price. Annie’s went public just over two years ago. (Reuters)

The auto industry is roaring back to life and Ford Motor CEO warned lenders and consumers not to fall back on old habits. His comments come as six- and seven-year car loans are becoming more common, along with incentives and discounts to get people to buy vehicles. Lenders are also relaxing the most stringent lending standards adopted after the 2008 financial crisis. (Yahoo Finance)

The National Federation of Independent Business, small business optimism index edged higher in August as more owners expect business conditions to improve and plan to increase capital spending. Eight of the index's 10 components either improved or showed no change. (Reuters)

Think things were bad here?  Spain’s housing prices rose for the first year-on-year increase since 2008.  That is six years.  Housing prices have declined 35% in Spain as a whole over the past six years. (Wall Street Journal)

Economy Adds 142,000 Jobs


The US jobs report is out and it says the US economy added 142,000 jobs in August. That is the smallest gain since December 2013. That breaks a six month streak of over 200,000 in job gains.  Wages were up 0.2%.  The unemployment rate stands flat at 6.1%. (Fox Business News)

Starbucks is opening two new types of stores aimed at capturing the growing demand for upscale reserve coffee and an "express" store offering speedy service. The move comes as Starbucks faces growing competition from high-end craft coffee sellers, as well as from fast-food chains. (Reuters)

According to the Federal Reserve the U.S. economy expanded at a "moderate" pace in recent weeks, with the auto industry showing strong growth and banking conditions improving. Essentially all regions of the country reported difficulties finding certain types of skilled labor, citing information technology, truck drivers and construction workers as some of the occupations with shortfalls. (Reuters)

Factory orders rose 10.5% in July, the biggest one-month increase on record going back to 1992.  Orders for motor vehicles and parts rose 7.3% reflecting continued strong consumer demand for new cars and trucks. Demand for machinery was down 1.2% and orders for computers and other electronics products fell 14.7%. (Associated Press)

An Economic Buffet


Lots of economic data today.  It will almost certainly have some impact on the markets.  The S& 500 has started each day higher only to close lower this week.  Will it be a repeat today?  (Fox Business News)

US employers plan to cut about 40,000 jobs in August, down 21% from last August.  Through August job cuts totaled 332,931 this year, down 4% from the 347,095 cuts announced in 2013. Job cuts were heaviest in the technology sector. (Challenger, Gray & Christmas)

The ADP jobs report says the US economy added 204,000 private sector jobs in August.  Additions were across all sectors of the economy.  Small businesses added 80,000 jobs, their first strong performance since the recovery began. (CNBC)

New unemployment claims were up 4000 this week to 302,000. A strong number and at its lowest level since June of 2007. (CNBC)

US productivity was up 2.3% last month.  That was a little weaker than anticipated but still strong.  Labor costs were down 0.1% showing no wage inflation. (Bloomberg)

US consumer sentiment rose in August and an index of current economic conditions hit its highest level since July 2007.  Consumer confidence rebounded in late August due to a positive reassessment of prospects for the national economy,. (Thomson Reuters/University of Michigan)
 

Cash and School


The St. Louis Federal Reserve published a paper blaming the low level of inflation in large part on consumers and their "willingness to hoard money." There is lots of cash sitting around. Banks have put away close to $2.8 trillion in reserves, and households are sitting on $2.2 trillion in savings—about a 50% increase over the past five years. (CNBC)

Harvard, with the world's largest university endowment, is still seeking to recover from a 27% investment loss incurred during the financial crisis.  So Harvard alumni are upset about paying endowment management $132.8 million in salaries, bonuses and benefits last year, up from $63.5 million in 2010. The endowment management company, oversees the university's $32.7 billion endowment, employs 324 people, up 19% from 2009. (Bloomberg)

Back to school and parents are worried.  Nearly two-thirds of parents with children ages 15 to 17 worry that college costs will jeopardize their ability to save for retirement. About half of parents say they don’t have a plan to pay off their children’s student loan debt. Moral to the story – don’t jeopardize your retirement to put your kids through college and it is your kids debt not yours. (Chicago Tribune)

U.S. banks' are lending money as loan balances hit $8.11 trillion in the second quarter, marking a 2.3% jump from the first quarter, the biggest quarter-over-quarter increase since late 2007, and the first time U.S. bank lending has surpassed $8 trillion. (BAI Research)
 

Oil Under Pressure


Unofficially summer is over and kids head back to school. August was the second best monthly performance of 2014 for stocks and Wall Street bulls are hoping for more of the same as September gets underway. The S&P 500 was up over 4% in August and is up almost 8.5% for the year. (CNBC)

The US Dollar reached its highest level in almost a year against the euro as signs of U.S. economic growth and tensions in the Ukraine boosted demand for the currency. This move makes imported goods cheaper for consumers, but makes our exports more expensive and makes life difficult for our manufactures. (Bloomberg)

Oregon outdoor wear maker Columbia Sportswear and the Dallas Cowboys have entered an apparel licensing partnership starting in late spring 2015 through early 2018.  This is the first time Columbia has partnered with an NFL team. They do have relationships with 33 colleges, including Oregon and Oregon State.  (Oregon Live)

A growing number of homeowners are reaching retirement still owing money on their houses. The share of Americans 65 and older with mortgage debt rose to 30% in 2011 from 22% in 2001. Loan balances have also increased, with the median amount owed climbing to $79,000 from $43,400 over the decade. (Bloomberg)

Longest Winning Streak of the Year


It’s the last trading day of August and then it is on to fall trading. U.S. stocks are higher this morning shrugging off concerns about the Ukraine. The S&P 500 is poised for its first four-week win streak of the year. (CNBC)

The July numbers on personal income and consumer spending show a 0.2% increase in income following a 0.4% rise in June, and a 0.1% decline in spending after June’s 0.4% increase. Both of these numbers were weaker than economists expected. (Associated Press)

U.S. home buyers signed more contracts to buy existing homes in July. Interest rates are lower than they were a year ago, price growth continues to moderate and total housing inventory is at its highest level since August 2012. Sales in the West rose 4.0% from June, but remain 6.0% below July 2013. (CNBC)

The Securities and Exchange Commission has launched a broad examination of alternative mutual funds, one of the hottest and most controversial investment products being offered to small investors. Alternative funds, describe a class of mutual funds that employ hedge-fund-like strategies, including betting on some stocks and against others, trading futures contracts and using derivatives to increase leverage. (Market Watch)

2nd Quarter GDP Even Higher


U.S. stocks are sharply lower in early trading as accusations fly in the Ukraine-Russia crisis. The S&P 500 eked out its 31st record of the year Wednesday, again closing above the 2,000 level. (CNBC)

The second estimate of 2nd quarter Gross Domestic Product shows the economy growing at an annual growth rate of 4.2%, slightly lower than the first estimate of 4.0%. (Bloomberg)

The Labor Department’s weekly jobless claims show 298,000 new claims last week the same as the prior week. (DOL)

Americans are more anxious about the economy now than right after the Great Recession despite an improving economy that is moving closer to full health. Seventy-one percent of Americans say they think the recession exerted a permanent drag on the economy. By contrast, in November 2009, only 49% thought the downturn would have lasting damage. (Associated Press)

Median household income has been on the rise for the past three years, climbing 3.8% to $53,891 in June. Median income remains 3.1% below its June 2009 level of $55,589. Midwesterners experienced a surge in median income since 2011, boosting them back to pre-recovery level. Southerners median income, however, is still 6.1% below its June 2009 level, while Northeasterners and Westerners saw their median income slip about 4%. (CNN Money)

Oregon Leads in Gas Prices


U.S. stocks edged higher on Tuesday to lift the S&P d500 just a hair above the 2,000 mark, its first close above that milestone. Volume this week is very light as lots of people are still on vacation. (Reuters)

US consumer confidence increased for a fourth straight month in August. The consumer confidence index rose to 92.4 from 90.3 in July, compared with 81.8 a year ago. It was the best level for the index since February 2008.  Improving business conditions and robust job growth helped boost consumers' spirit (AFP Services)

That may have been a bubble. Gun maker Smith & Wesson is plunging in trading by 12% after reporting a 19% decline in sales and profits plunged 39% in the second quarter.  The current market environment reflects high inventories resulting from restocking that occurred following a two year surge in consumer buying. (PR Newswire)

The Schiller Park, Ill., bakery, where Twinkies were invented in 1930, will close. The facility was reopened in July 2013 after the company's bankruptcy and acquisition by private equity firms. Originally, Hostess had 11 plants with a union workforce, that number is now three. This closing will affect about 400 employees. (CNBC)

S&P 500 at New Record


Investors watch for an S&P 500 close above 2,000 after breaking that level intraday on Monday.  International concerns in the Ukraine, Syria, and Libya are front and center today.(CNBC)  

Durable goods, a measure of capital spending, was up 22.6% on the back of aircraft delivers.  Take out transportation (read aircraft) and the number was down 0.8%. This is a very volatile number and should be looked at over the long-term. Overtime this number is consistent with a growing economy. (Associated Press)

The Securities and Exchange Commission has warned investors to avoid fraud involving marijuana-related stocks which scammers are promoting to cheat you. Four stock promoters with roots in Washington and Oregon have been charged with securities fraud after manipulating stock, including marijuana-related companies GrowLife and Hemp Inc.  Marijuana is currently a $1.5 billion-a-year industry, and is expected to triple in a few years. Medical marijuana is legal in 23 states. (Portland Business Journal)

Wells Fargo has relaxed its standards for jumbo, non-guaranteed, home loans. The largest U.S. mortgage lender is trying to combat an industry-wide drop in home mortgage volumes. The bank lowered the minimum credit score on these fixed-rate jumbo mortgages to 700 from 720.  This is part of a trend to loosen mortgage criteria that are still tight by historical standards. (Reuters)

Business News


US Stocks saw gains for the 3rd week in a row last week after a slew of better-than-expected economic data.  The S&P 500 is now within 4 points of the 2000 point mark.

Burger King is negotiating to buy the Canadian company Tim Horton's the maker of coffee and donuts.  The deal will be structured as a tax inversion to move Burger King's domicile out of the United States which would save the company billions in taxes.  Shares of Burger King are 14% higher on that news.(marketwatch)

After weeks of rumors Bank of America and the Department of Justice have announced a $16.65 billion mortgage settlement.  The bank has agreed to pay $9.65 billion in cash to the Federal Government and 6 states, while also providing $7 billion in mortgage relief to consumers.  Shares of Bank of America rose on the news as investors think this will be the final settlement the bank will have relating to the financial crisis.(CNBC)

European stocks rallied today after the European Central Bank President, Mario Draghi unexpectedly suggested another round of stimulus may be on the way for the European economy.  That news sent European stocks higher and the Euro lower.(marketwatch)

AAA says that Americans will travel this Labor Day weekend at the highest rate since 2008.  35 million Americans are expected to travel 50 miles or more this weekend with gasoline prices the lowest they have been in the month of August since 2010.  It seems Americans are optimistic about their financial situation this labor day.(yahoo finance)
 

S&P Nears 2000


A potential market mover could be Fed Chairman Janet Yellen’s address before central banker’s in Jackson Hole at 10 am today.  The S&P 500 is less than 8 points away from closing above the 2,000 level for the first time ever. (CNBC)

The US manufacturing sector expanded in August, rising at the fastest pace in more than four years, according to the survey company Markit. "August's survey delivers further evidence that robust manufacturing growth momentum has been sustained through the third quarter," says Tim Moore, senior economist at Markit. (Reuters)

The index of U.S. leading indicators rose in July by the most in four months, as stronger job growth helps power the world’s largest economy.  The Conference Board’s index of U.S. leading indicators, a gauge of the outlook for the next three to six months, climbed 0.9% after a 0.6% gain in June. (Bloomberg)

US corporate-bond issuance is moving toward a record for the third straight year—with nearly a trillion dollars sold by companies so far, as they take advantage of a surprising interest-rate decline to stock up on cash. (Wall Street Journal)
 

Stocks Rise -- Oil, Gold Fall


Equity markets continue to melt up.  The S&P 500 moved up for a third straight session yesterday. The S&P 500 flirted with a record Wednesday, but closed just short of the mark. (Fox Business News)

New applications for unemployment claims fell 14,000 to 298,000.  New applications for unemployment are at their lowest levels as a percentage of the labor force since 1967. (Associated Press)

A once iconic brand continues its slide into the abyss. Sears, also the owners of Kmart, reported its ninth straight quarterly loss.  The second quarter loss widened to $573 million and sales continued their decade-long fall down by 9.7%. (Reuters)

Nobel Prize winner Lars Peter Hansen says uncertainty surrounding regulation is hindering U.S. economic growth. He says, "I think the uncertainty that institutions on what kind of regulatory environment there is going to be in the next few years is contributing to caution … … in a way that is going to be counterproductive. I think clarity in policy is really critical … ,". (CNBC)

As the world continues awash in oil it is moving down 67 cents to $92.78 barrel. The U.S. is pumping the most oil in 27 years, adding more than 3 million barrels of daily supply since 2008. The U.S. imported 7.2 million barrels a day of crude in May, a 26% drop from the same month in 2008 when oil prices spiked. (Bloomberg)

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