The 1st Quarter wasn't a great one for stock investors as investors played it safe in defensive sectors. This weeks economic news highlighted by the jobs report on Friday should provide investors more fireworks. This morning the US Stock market has opened
Shares of Facebook lost 11% last week after the company announced they would pay $2 Billion to buy Oculus a maker of virtual reality goggles. Wall Street analysts are disappointed that Facebook appears to have wildly overpaid for yet another technology company. Shares of Facebook have turned positive at $60/share in early trading. (yahoofinance)
China's Premier sought to reassure some nervous global investors over the weekend. He assured investors that Beijing was ready to support their cooling economy saying the Chinese government would push ahead with infrastructure investments that would spur growth. Asian equity markets rallied sharply on that news.(marketwatch)
Portland State University is out with their list of the fastest growing cities in the state of Oregon from 2010 to 2013. Madras was the 4th fastest growing city in the state over the last 3 years edged out by Wilsonville, The Dalles, and Happy Valley in the #1 spot.(Portland Business Journal)
And 60 Minutes had a piece last night with author Michael Lewis where Lewis proclaimed the US Stock market is rigged. Mr. Lewis was promoting his book Flash Boys where he claims the markets have been taken over by high frequency traders giving them the edge over little guys like you an me. It would be great if the SEC took some action on the outrage this should cause.(marketwatch)
>>Payroll Report Due Out This Week
(New York, NY) -- The most watched economic report is due out this Friday when the monthly payroll report is released. A hiring increase is expected and it should be enough to help push the markets higher. Manufacturing and service sector numbers are also due out with experts predicting solid numbers to show the economy is still on the upswing. Car sales figures will roll out and so will private sector-payrolls and the February international trade deficit report. Today’s trading marks the final session of the month and first quarter.
>>Credit Card Security Company Denies Role In Target Breach
(Chicago, IL) -- A credit card security firm is denying it had any role in a massive data breach at Target. Trustwave Holdings' CEO Robert McCullen says his company had no part in the oversight or monitoring of Target's credit card processing, which was compromised by hackers late last year. McCullen posted an open letter on his company's website to counter claims made in a lawsuit seeking at least five-million dollars in damages from both Target and Trustwave. Two banks have sued both companies, saying they failed to properly secure the credit card data of around 40-million customers.
>>Oculus VR Reports Death Threats After Purchase By Facebook
(Undated) -- Employees at Oculus VR are apparently feeling the downside of being part of a two-billion dollar purchase by Facebook. The virtual reality firm's founder Palmer Luckey posted on Reddit that employees and their family members were receiving "death threats and harassing phone calls" following the announcement last week. Luckey said the negative reaction was unwarranted, adding that it was "impacting people who have nothing to do with Oculus." Some of the negative reaction stems from critics who are upset that Oculus began using two-point-four-million dollars in funding raised through Kickstarter. The company confirmed last week that none of those who invested through the crowdfunding site will receive any part of the two-billion dollar sale price.
Markets started the day up again yesterday, for the fourth day this week, only to turn negative as the day wore on. The S&P 500 is currently on track to be flat for the first quarter that ends on Monday. (Seeking Alpha)
In February personal income was up 0.3% and consumer spending rose 0.3%. Both numbers are what were expected and show a growing but not overheating economy. (CNBC)
Oregon is poised to participate in the great American energy renaissance as the US Department of Energy approved exports of liquefied natural gas from the port of Coos Bay. The Jordan Cove Project will require the construction of a shipping terminal, a natural gas fired power plant and a 230-mile pipeline. The project will provide $7.5 billion in capital, 150 permanent full-time jobs and original construction jobs. (Wall Street Journal)
Inflation is pretty tame in the overall economy, but that is not true when it comes to your entrée at dinner. Meat is rising at a faster pace than any other food group. Beef prices, cattle numbers are at their lowest levels since 1951, are up 20% from last year and pork prices are up 56%. (Bloomberg)
There is lots of change and consolidation currently happening in the media delivery arena. Adding to the fray are reports that Dish Network and DirecTV are in merger talks. Combined the two companies have 34 million customers. Talks come as Comcast and Time Warner Cable are merging in a $45 billion deal. (Bloomberg)
Markets started higher yesterday then sold off as we had a very strong US Treasury auction that drove rates on the 10-year note to 2.7%. As we start today the S&P 500 is essentially flat for 2014. (CNBC)
New unemployment claims for last week were down 10,000 to 311,000. That is a good number and shows a strengthening job market over the next six months. (Reuters)
The final reading on fourth quarter gross domestic product was revised up to 2.6%. The private sector grew much quicker and government showed contraction. (Reuters)
Beer is big business in Oregon with 188 “brewing establishments” of which 50 are in Portland and 18 in Bend. (Oregon Live) Other Oregon brew facts include:
5127 persons employed by the industry.
$28,190 is the average worker pay.
Oregon holds 5.7% market share of the national craft brew industry.
For decades a lot of companies claimed severance packages for terminated employees was not subject to Social Security and Medicare taxes, claiming they were supplemental unemployment benefits. On an 8-0 vote the Supreme Court put an end to that practice. Over $1 billion in tax revenues and potential refunds were at stake in the case. (Bloomberg)
We start the day with consumer confidence being at its highest level since late 2007, just before we slipped into the Great Recession. The index stands at 82.3 driven higher by better outlooks for increased hiring and improved business conditions. (Business Insider)
Durable goods orders, ex aircraft, in February rose 0.2% versus being up 0.9% in January. (Department of Commerce)
Home prices in America’s 20-largest cities climbed 13.3% during the last 12-months according to January data. Since the bottom of the index in 2013 home prices have rebounded 23%. Portland, which is included in the survey, was right at the national average. (S&P/Case-Shiller)
Oregon’s personal income grew 3.5% last year adding $5.4 billion to the economy. Oregon’s per capita income is $40,233 which is only 90% of the national average, a gap that has been growing since 1990 when the spotted owl crippled the forest products industry. We are number 32 in national per capita income. (Oregon Live)
Another example of the death of DVD comes from Oregon media measurement company Rentrak. They are selling their “Pay-Per-Transaction” business that measures DVD rentals. They say as viewers move to other medium their revenue from the business has fallen from $100 million in 2006 to $7 million in 2013. (Oregon Live)
Markets swung from up to down on Friday as we had big intraday volatility, some of which was caused by triple options expiration.
While we slept China factory output contracted for a third straight month in March. That has many concerned that the world’s second largest economy could really be slowing and could drag on the rest of the world. (CNBC)
In 2013 patrons to bars and restaurants cut back on alcohol consumption by 1.3% and that trend is slipping into 2014. The $683 billion restaurant industry has been challenged and the loss of a high margin item is concerning. The spirits industry continues to grow however as consumers are buying higher end liquors for home. (USA Today)
Starbucks says they are done testing and will expand the rollout of alcohol to thousands of stores over the next several years. The alcohol sales come with an expanded light fare appetizer menu. But a double jolt of caffeine and alcohol to get your morning going will not be happening ….. Alcohol sales will only occur after 4pm. (Bloomberg)
Oregon private timberland investment firm the Campbell Group is changing their name to Campbell Global. The company started business in 1981 and now manages more than 3.1 million acres in the US and Australia, employing over 300 people. (Portland Business Journal)
Equity markets shot up yesterday celebrating the first day of spring and rebounding from the Fed sell-off from the day before.
Nike global sales rose 12.7% last quarter to $6.97 billion. Profits were essentially flat on a per share basis. Future orders were way up. However Nike stock is down 3% in pre-market trading as the company says a stronger dollar and weaker currencies will be a big and continuing hit to the bottom-line this year. (Reuters)
The sale of previously owned homes in the US fell to 20-month lows in February. Rising prices and increasing borrowing costs were cited as drags. (Bloomberg)
Oregon’s other Fortune 500 company; Precision Castparts is acquiring Aerospace Dynamics International for $625 million in cash. The acquisition is the company’s 14th in the last two years and brings 625 new employees to the company. (The Street)
The price of limes for your Margarita may be going up. Growers in Mexico are limiting their harvesting of the tart fruit to maintain higher prices. Lime prices were up 68% in February alone in Mexico. (Bloomberg)
Join us Saturday at 10 for Financial Focus when Tyler and I will talk about a new report showing how you may be leaving money on the investing table.
In her first post meeting press conference yesterday Federal Reserve Chairman Janet Yellen told us what we already knew and that sent Mr. Market into a tail spin as markets sold off a little more than half a percent. It is expected the Fed will start to raise interest rates in late 2015 as long as the economy continues to improve. Lots of action on little news. (Market Wire)
Just four months removed from Black Friday and 280 days till Christmas, Wal-Mart is firing the first shot in fighting for your spring shopping dollar. Tomorrow the company is putting pressure on Lowe’s and Home Depot as they slash prices on lawn mowers, patio furniture and outdoor living supplies. The Easter selling season makes up a huge part of retailer revenues and Wal-Mart is angling to regain momentum after a year of same store sales losses. (CNBC)
Umpqua Bank is suing Target over that big holiday security breach. The bank says they will be left hanging with fraudulent charges as a result of the breach. They say Target was negligent and not current in providing card security. The Consumer Bankers Association puts the cost of card replacements alone at $200 million. (Portland Business Journal)
BMW says their profits will grow in the high single digits in 2014. BMW, Audi and Mercedes are in a fight to see who claims leadership of the luxury car market. (Bloomberg)
Today at 11am we hear from the Federal Reserve and the results of their two day meeting. We will also hear from Chairman Yellen at her first post meeting press conference.
The number two package delivery company, FedEx, posted disappointing earnings for last quarter citing “brutal winter weather”. Sales were up 3% to $11.3 billion as ground delivery picked up, but special delivery was flat. The company posted a quarterly profit of $378 million. (Reuters)
You will soon be able to pay for that Whopper with your smartphone at Burger King with their new ap. The move is targeted toward attracting younger customers. The company says the next step is to allow preordering for pick-up when you arrive at the store location. (Bloomberg)
It has been a tough year for ski resorts, but one Oregon resort will not even open this year. Mt. Ashland in the Siskiyou’s will not open for the first time in 50-years due to lack of snow. Economic impacts mean the loss of 130 jobs, $10,000 per month not spent on diesel for snow cats and the loss of $2500 of propane a month and $9000 per month in power bills. (Oregon Live)
A measly $1000 is all 36% of workers have saved for retirement, but that is up from 28% last year. A whopping 90% of households have some type of retirement account. (Employee Benefit Research Institute)
Today the Federal Reserve starts a two day policy meeting in Washington, DC. At stake are continued reductions in their bond buying program and hints as to when they will start raising interest rates.
Consumer producer prices were up 0.1% in February. This number shows essentially no inflation pressures in the economy. (Associated Press)
Housing starts during February dropped by 0.2% on cold winter weather and new building permits were up 7.7%. (Reuters)
Copper is trading at 44 month lows as worries about growth in China and the government lets the Yuan trade in a wider band push prices lower. China consumes almost 40% of the world’s copper. (Bloomberg)
US factory production rose the most in six months during February even with all the bad winter weather. The 0.8% gain follows at 0.9% slump in January essentially leaving us where we were in December. Automakers were the big winners with production rising 4.8%. (Market Watch)
The number of millionaire households in the US spiked by 640,000 or 7% to 9.63 million in 2013. That is an all-time high since records started being kept in 1997 and the first record since we 2007 when we entered the recession. Households worth $5 million rose by 100,000 to 1.24 million and those worth $25 million were up 15,000 to 132,000 households. (Spectrem Group)
This week we are set-up for a two day Federal Reserve meeting that will conclude with Chairman Janet Yellen giving her first press conference. For the time being markets seem to be shrugging off event in Europe and are looking to open higher.
In 2013 the percentage of workers relocating for a new job climbed 35% according to outplacement firm Challenger, Gray & Christmas. About 13% of those finding a new job relocated. This is a good economic sign that companies are starting to hire and people can also sell their home and be able to move.
Your taxes are due one month from today and Oregonians face the fourth highest tax rate in the nation on dividends at 31% on the top rate. California was the highest at 33% and Washington the lowest at 25%. (Tax Foundation)
US corporations continue to build their cash reserves in foreign banks adding another $206 billion in 2013. Total offshore cash for US companies stands at $1.95 trillion up 11.3% from last year. Microsoft, Apple and IBM accounted for 18.2% of last year’s cash increases. (Bloomberg)
Apple is the most desirable mobile-phone brand in the emerging market countries. Market share for Apple jumped from 21% in 2012 to 32% last year. Number two Samsung dropped to 29% market share in 2013. (Upstream)
Markets sold off and bonds gained yesterday on international events in China and the Ukraine. The S&P 500 was down over 1% and the 10-year Treasury fell in yield 10 basis points to 2.65%. (CNBC)
Oregon’s Erickson Air-Crane posted a loss of $1.7 million in the fourth quarter on sales of $92.5 million. The cost of recent acquisitions was cited for the loss. Shares were down about 2% in after-hours trading. (Business Wire)
Liquor sales in Oregon increased 6.2% in January from the year before while volume was up only 3.6%. That shows we are not drinking more but higher priced spirits. The State sold $37.5 million in booze in January 2014. This comes as we prepare for a push to privatize the Oregon hard liquor market. (Oregon Live)
Exports from China to the US have plateaued. This comes as manufactures are moving production to Vietnam, Bangladesh and even the US. About 19% of all US imports come from China. This shows a continued diversified globalization of the world economy. (Bloomberg)
Join us Saturday at 10 for Financial Focus when we will talk to “The Conversation Project” about end of life issues.
US retail sales rose 0.3% in February. That is better than expected and stops a two month slide. (Bloomberg)
Inflation on imported goods was up 0.9%. That is about twice as much as expected and does show a little bit of possible inflation pressure. (Associated Press)
New unemployment claims were down 5000 to 315,000 a good number. (Department of Labor)
US consumer inflation has risen at an average annual rate of 1.62% over the last five years. But how you feel it all depends on what you buy. During the same time period cigarettes and long distance phone calls were up 10% annually, peanut butter was up over 7% and bacon was up 6%. Falling prices included TV’s down over 13% and computers down 8%.(Wall Street Journal)
As Oregon’s largest employer, Intel, struggles with flat sales in a growing market they are cutting jobs. The company says they will shed 400 more jobs in April on their way to shedding 5% of their workforce. How many of the 400 jobs being cut will be from the 17,000 in Oregon was not released. (Oregon Live)
Northwest headquartered pizza maker Papa Murphy’s has filed paperwork to become a publically traded company. The IPO looks to raise about $70 million. Papa Murphy’s is the nation’s 5th largest pizza chain with 1418 locations. (Reuters)
Stocks are showing some weakness on international concerns including perceived economic slowing in China and uncertainty in the Ukraine. China consumes 40% of the world’s copper and has sent the metal into an epic 4-day decline reaching its lowest price level in 44-months. (CNBC)
The National Federation of Independent Business Small Business Optimism Index crashed down to its lowest level in three years during February. The report showed new weakness in small business owner’s expectations for future sales and economic growth.
The dating is over and there is going to be a wedding. Men’s Wearhouse will buy Jos A Bank for $1.8 billion in cash. As part of the deal Jos A Bank will terminate the agreement they made earlier this year to buy Eddie Bauer. (Market Watch)
In what could be another weather related economic event, merchandise piled up on wholesaler shelves in January. Inventories climbed 0.6% and sales fell 1.9%. Even with the increase inventories are historically lean. (Wall Street Journal)
You thought the NSA was what you had to worry about when you are online? Nike along with Intel has taken a stake in Reflektion, a company that used online analytics to predict consumer shopping habits. (Oregon Live)
Oil was down almost $2 yesterday and is down another $1.50 today at $98.50 a barrel. The realization that demand growth maybe slower than thought and lots of supply are making for a slippery pricing situation. (Bloomberg)
As we celebrate 5-years of a bull market many are speculating when its death will come. While markets are at record highs there is another record to keep your eye on. Aggregate profits for the S&P 500 in Q4 will total about $28.78 per share, an all-time record. Profit growth in 2014 is expected to be 8.8%. Profits are the true mother’s milk of stock prices. (CNBC)
Dicks Sporting Goods reported profits 8% higher than a year earlier last quarter on sales that were 7.3% higher. The company is projecting double digit earnings growth in 2014. Dick’s operates 588 stores in 46 states. (PR News Wire)
Over 86% of manufacturers have a positive outlook for 2013, the most optimistic in two years. Still a concern for manufactures is excessive government regulation and a burdensome tax code. (National Association of Manufactures)
The Golden Arches saw their fourth straight month of declining same store sales in February. Global sales fell 0.3% for the month and sales at their 14,200 US locations declined 1.4%. Increasing competition in the breakfast space and weather were noted as sales drags. (Bloomberg)
Salem’s Kettle Chips could be on the sales block again. Owner Diamond Foods is rumored to be shopping the chip maker it bought in 2010. Kellogg’s, owner of Pringles, is a possible buyer. (Oregon Live)
The end of the financial crisis is now 5-years in the rearview mirror as we celebrated the market bottom on the S&P 500 of 666 yesterday. The S&P 500 closed at 1878 on Friday. (Fox Business News)
China says their exports plunged 18% last month while imports climbed 10%. That is worse than expected and sent the Chinese stock markets to 5-year lows. (CNBC)
In a sign that company’s maybe coming to the end of their ability to make the manufacturing process more efficient, productivity gains for 2013 were just 0.5% their lowest gains since 1993. This may mean companies will have to expand factories and add jobs as the economy and demand grows. (Wall Street Journal)
US household net worth rose by almost $3 trillion in the fourth quarter of 2013 to a record $80.7 trillion. That is an almost 4% gain from the previous quarter. More jobs, rebounding home prices and a climbing stock market all contributed to the gain. (Bloomberg)
Borrowing money to buy stocks, known as margin debt, posted its seventh consecutive monthly record high in January, climbing to $452 billion. Margin debt has more than doubled since the start of 2000. Some think this is a bearish sign for the markets. (Reuters)
The US Department of Labor says the economy added 175,000 jobs in February. Much better than anyone had expected. The private sector added 162,000 jobs and governments added 13,000. The unemployment rate stands unchanged at 6.7%.
The nation’s second largest grocer, Safeway, is being sold to the private equity firm Cerberus for more than $9 billion in cash and stock. The sale will put Albertson’s and Safeway in the same ownership group. The expanded lineup has over 2400 stores and will put it in competition for the nation’s largest grocer with Kroger. (Reuters)
As the era of the private sector pensions in the US comes to an end, Boeing is freezing the pensions of 68,000 nonunion and executive employees. Retirement benefits will now come in the form of a 401k. The move will help curb the $3.5 billion in pension expenses they have incurred over the last year. (Bloomberg)
Ragu -- “America Favorite Pasta Sauce” -- is being placed on the sales block by its parent Unilever for a reported $2 billion. Unilever is selling its food brands including Skippy and Wishbone last year. The company bought Ragu in 1987. (Bloomberg)
Mr. Market was in an oh um mood yesterday as the S&P 500 and NASDAQ ended near the flat line. The markets shrugged off less than stellar jobs and non-manufacturing sector production numbers and seemed to blame them on poor winter weather. (Seeking Alpha)
The number of US companies planning layoffs in February declined 24% from a year earlier to 41,835. The financial sector made up almost 25% of the months layoffs. (Challenger, Gray & Christmas)
Costco profits fell 15% to $463 million for the latest quarter. Sales increased 6%. Discounting during the holiday season hurt profit margins and foreign exchange rates from international operations also stunted the bottom-line. (Reuters)
Retailers that don’t figure out how to compete in the world of online shopping may go the way of the dodo bird. Staples is closing 225 stores as more and more office supplies are being purchased online. The move will save the company $500 million by 2016. Which stores will be closed is unknown. (Bloomberg)
Ford, the only domestic auto manufacture not to be bailed out by the federal government and tax payers, saw sales in China climb 73% during the first two months of the year. The Ford Focus is the bestselling car in China. (CNBC)
We took a big bounce up yesterday, more than making back the losses of the day before. The S&P 500 stands at a record closing high of 1873.91 as we start trading today. (CNBC)
The ADP jobs report says the private sector added 139,000 new positions during February. The number was a little lighter than expected. (Market Wire)
Oregon software designer Mentor Graphics saw sales climb 16% in the fourth quarter and 6.2% for the entire 2013. Profits jumped almost 5% for the quarter and 10% for the year. The increasing complexity of computer chips is pushing the demand for its design software. (Business Wire)
Oregon’s 28 banks saw cumulative profits of $204 million in 2013. Oregon banks hold almost $16 billion in assets and employ about 4550 persons. (Federal Deposit Insurance Corp)
Global computer chip sale totaled a record $26.3 billion in January an almost 9% annual increase. The numbers clearly shows the shift from PC’s to mobile devices. Oregon’s largest employer Intel is stuck in that rut as they are projecting a third year of flat sales even as chip production increases at other companies. (Oregon Live)
Today that wonderful breakfast sensation and college breakfast treat, the Pop-Tart turns 50 years old. The Pop-Tart comes in 29 delicious flavors. (The Daily Meal)
Geopolitical tensions have markets on edge today as Russia invades the Crimea. This has the fear trade firmly in charge as we sort things out.
Disney has raised prices at their theme parks for the second time in a year, this time by 4%. Theme park admissions account for 20% of the company’s revenue. One day in the Magic Kingdom now costs an adult $99. (Forbes)
Oregon companies are rearranging the chairs in the corporate boardroom.
Bruce Pettet is the new CEO at optics maker Leupold & Stevens. The company employs 600 persons in Oregon. (Oregon Live)
Nick Konidaris has been relieved as CEO at chip equipment maker ESI. He will be succeeded by Ed Grady a current member of the board. (Portland Business Journal)
Fitness equipment maker Nautilus has named its third CFO in three years. Sid Nayar the new CFO most recently was CFO with Congoleum flooring. His base salary is $260,000. (Oregon Live)
Men’s Warehouse and Jos. A. Bank are officially dating. The two companies have entered a non-disclosure agreement as they are now talking face-to-face about possibly merging. (Reuters)