U.S. stocks sold off on Monday, with the Dow industrials seeing the biggest drop in more than three months, as investors reacted to the unraveling crisis in Greece by dumping riskier assets like stocks. US Stocks are now in neagative territory in 2015.
Negotiations between Greece and its creditors essentially collapsed over the weekend after Greece's Prime Minister unexpectedly called for a referendum on whether to accept reform measures demanded by the country's lenders. The country's parliament approved the vote, which will be held July 5.
Puerto Rico's governor said yesterday that the commonwealth cannot pay it's roughly $72 Billion in debts, an admission that will have wide-reaching financial repercussions. Knowing the US government won't step in to offer debt relief the governor and his staff plan to seek signifigant concessions from all of the countries creditors. Puerto Rico an island of 3.6 million people has piled on more municipal debt per capita than any other American state. A broad restructuring of Puerto Rican debt will be an unprecedented test for the American Municipal Bond market.
Pending home sales in May rose to their highest level in over nine years, according to the National Association of Realtors. The pending home sales index rose 0.9% in May after a slight downward revision in April, the NAR said. The index level of 112 is the highest since April 2006 and up 10.4% from May 2014.
Adding insult to injury Standard & Poor's downgraded Greece's credit rating deeper into junk territory, saying the government's decision to hold a referendum on creditor proposals brought it closer to default. S&P puts the odds of Greece defaulting and leaving the Euro at 50/50.
With three trading days left in the second quarter, the S&P 500 and NASDAQ are tracking positive for the past three months and the year, but they're both negative for June. The Dow transports entered correction territory yesterday. (CNBC)
Nike reported quarterly profit of $865 million. The results exceeded Wall Street expectations. The athletic apparel maker posted revenue of $7.78 billion. For the last four quarters the company reported profit of $3.27 billion and revenue was $30.6 billion. Nike shares have increased slightly more than 9% since the beginning of the year. (AP)
The Greek crisis has been weighing on stocks all week, as they face a debt default . Tomorrow's meeting of euro zone finance ministers is seen as crucial. Join us Saturday at 10 for Financial Focus Radio when I will tell you what I saw on my trip to Greece. An on the ground report. (CNBC)
Micron Technology said it expects a further decline in prices of chips used in personal computers, and forecast lower. Micron Technology makes both dynamic random access memory (DRAM) chips, used mostly in personal computers, and NAND memory chips for storing music, pictures and other data on smartphones, cameras and other mobile devices. The company will focus more on DRAM chips for mobile phones and was also planning a new chip that can store 16 times more data than chips available now. (Reuters)
Boeing announced Tuesday it would replace CEO Jim McNerney with its current chief operating officer Dennis Muilenburg. McNerney oversaw a near doubling of revenue to a record $90.8 billion last year, and hailed the change as a “generational shift”. Next year, the company celebrates its 100- year anniversary (CNBC).
The Obama administration has cleared the last procedural hurdle in its bid to close the biggest trade deal in a generation, after a bill granting fast-track authority passed the Senate. The Senate will vote to formally pass the legislation today. In the next few weeks, trade negotiators will meet to conclude over 5 years of discussions aimed at creating the Trans-Pacific Partnership, which covers 40% of the global economy, and is the biggest trade deal since the creation of the WTO. (FT)
International creditors have rejected the Greek government's plan to end its financial crisis, but they have submitted counterproposals. The International Monetary Fund is believed to be the most skeptical of the three institutions overseeing Greece's bailout. Its creditors have now put forward a new set of counterproposals, but the war of words continues… (CNBC)
The state of Oregon has ordered a number of insurers to raise proposed Obamacare premiums for 2016, after some of those companies asked for rates that were only moderately higher, or lower than this year. The state's move to force rates higher than those proposed is in response to concerns that Oregon's Obamacare prices were too low for what insurers were paying out to cover customers' health benefits. Oregon insurers collected $703 million in premiums last year, but paid out $830 million on their plans, according to the Oregonian. (CNBC)
Hostile takeovers are reaching heights not seen since before the financial crisis. Over $100bn worth of unsolicited offers were rejected this weekend, mainly in the energy and healthcare sectors. Deal activity has increased 43% from this time last year. (FT)
Facebook has replaced Wal-Mart as the 10th largest company by market capitalization. Yesterday's 2.7% gain by Facebook pushed the social media firm's market cap to $238 billion, and past that of the world's largest retailer. Wal-Mart hasn't finished a year outside the top 10 biggest S&P 500 companies by market cap since 1997. (S&P)
According to the Department of Labor, the United States currently has 5.4m job openings, but the number of people getting hired has yet to fully recover from the recession. The average job is vacant for 27 days before being filled, almost double the length of time in 2009. The length of the average interview process has also increased dramatically to over three weeks. (WSJ)
Martha Stewart is nearing a deal to sell her business to Sequential Brands, a retail-licensing company. Martha Stewart Living had a market capitalization of $370m on Friday, after shares surged on word of a potential deal. (WSJ)
Greek Prime Minister Alexis Tsipras made a new offer on a reforms package to foreign creditors on Sunday, signaling eleventh-hour concessions to break a deadlock that has pushed Greece to the brink of bankruptcy. The offer keeps alive some hopes that a last-minute deal may yet be wrangled before Athens runs out of cash. (CNBC)
It's looking like consolidation in the energy infrastructure space may have begun. Energy Transfer made an unsolicited $48bn bid for Williams late Sunday. The bid represented a 25% premium over the current price, valuing the operator of 33,000 miles of natural gas pipelines at almost $50bn. Williams quickly rejected the offer, but it could be the start of an interesting summer. (FT)
The fed's dovish stance in its latest FOMC meeting propelled stocks to near record highs yesterday, while the dollar plumbed a one month low. The markets were reflecting a more soothing than expected message from the Fed. (FT)
U.S. consumers are apparently not "loving it". This year will be the first year in McDonald's 60 year history that the fast-food chain will close more stores in its home market than it will open. The company still expects to open 125 restaurants this year, and still has over 14,000 domestic locations. (Reuters)
Fitbit shares soared on their debut yesterday, as the company's valuation skyrocketed to north of $6bn within the first 30 mins of trading yesterday on the NYSE. The stock finished 48% higher on the day, and the performance ranked Fitbit as the best performing flotation of the year, just outpacing GoDaddy. (FT)
It's not such a wonderful life in Greece these days. Depositors have pulled over $2bn euros from Greek banks the last 3 days in a rush for the exits in anticipation of a Greek default. The ECB told a meeting of Eurozone finance officials today that it wasn't sure that Greek banks would be capable of opening on Monday. (CNBC)
In yet another sign of improving underlying economic conditions, the birthrate has finally begun to climb again, in the first increase since 2007. There were 62.9 births for every 1000 women of childbearing age last year, compared to 62.5 the year before. (WSJ)
Federal Reserve chair Janet Yellen said yesterday that policy makers are still waiting to see "decisive" evidence of the strength of the economic recovery before beginning interest rate increases. The fed is treading a precarious line as it attempts to signal the first rate rise since 2006, while damping the risk of a market tantrum that could damage global growth. (FT)
The US Treasury announced yesterday that a woman will grace the cover of the new $10 bill, for the first time in more than a century. The Treasury is looking to the public for input, and the social media hashtag #thenew10 is where YOU can help decide who should take the starring role.
Airbnb, the popular home-rental site with its operational headquarters in Portland, is nearing completion of a VC funding round that will see its valuation reach $24bn. Some might find that rich for a company generating current annual revenues of just $900m. For comparison, hotel giant Marriot, with 4,000 hotels and $13.8bn in annual revenue, is valued at about $21bn.
US Stocks closed modestly higher yesterday as investors shrugged off worries about unsuccessful Greek debt talks. Investors are also awaiting the outcome of a two-day Federal Reserve monetary policy meeting which concludes today.
The maker of Marc Jacobs's fragrance and Sally Hansen nail polish, Coty, was the winning bidder yesterday for Proctor & Gamble division that sells make-up, fragrance, and hair products for $12 Billion. The deal makes Coty the largest player in the personal care business. Shares of Coty rose 20% on the news.
Fitbit the maker of wearable fitness trackers is set to go public this summer. Fitbit's business is booming, in the first 3 months of the year the company sold 21 million devices and have turned quarterly losses into big profits. The company's IPO is set to raise about $4.2 Billion for the company.
The Paris airshow is currently underway and the 2 largest aircraft makers in the world, Boeing and Airbus have booked over $42 Billion in deals on the first day of the weeklong event. Both companies received most of their orders for their new larger jets. Boeing now has an order backlog of 5,700 planes worth over $450 Billion. Shares of both companies rose on the news.
US Stocks finished broadly lower yesterday after the collapse of weekend talks over Greece's bailout plan. There continues to be a lack of progress in Greece's debt talks.
Building permits for new houses in the US rose 22% over the last 2 months which is the fastest pace since late 2007. Even with the sharp increases new housing construction remains far below long-term averages with builders trying to navigate an economy that has seen a protracted recovery from the Great Recession. Slow job and wage growth has made it tough for families, especially first-timers, to buy a new home.
In the wake of a sales slump the GAP said Monday that it plans to close 175 stores or 25% of their total store count to better reflect how their customers shop. After the closings there will be about 500 GAP stores remaining. The company also announced they plan to eliminate some home office jobs. All of that news sent shares of The GAP higher against a weak tape yesterday.
The US Manufacturing sector has slipped into a technical recession. 6 months in a row of decline is the definition of a recession. A strong dollar, global weakness, and lower oil prices are the contributing factors in the headwinds facing US manufacturers. The only bright spot has been manufacturing in the US auto sector.
Mr. Market is saying OPA as he gets out of bed! US stocks are lower this morning, with investors looking to follow European markets down, as talks between Greece and its creditors collapsed once again this weekend. (CNBC)
The Fed holds its two-day June meeting starting tomorrow, but it's not expected to hike interest rates this time around. Investors will be looking for clues on whether liftoff could come in September. (CNBC)
Wholesale prices in the U.S. rose in May as the biggest jump in fuel costs in at least five years swamped muted advances in other categories. The 0.5% increase in the producer-price index followed a 0.4% decline the prior month. Costs have dropped 1.1% over the past 12 months. (Bloomberg)
Bigger paychecks are giving American consumers reason to believe again. The University of Michigan’s consumer sentiment index for June rose to 94.6, from a reading of 90.7 last month. Households were the most upbeat about their wage prospects in seven years. (Bloomberg)
Colt Defense, the storied firearms maker, has filed for a Chapter 11 bankruptcy reorganization-hoping the process will clear the way for the sale of its business operations in the U.S and Canada. (USA Today)
U.S. retail sales surged in May, as consumers step up spending after a cautious start to the year. Sales at retailers and restaurants rose 1.2% from the prior month to a seasonally adjusted $444.9 billion. (WSJ)
Applications for unemployment benefits remained below 300,000 for a 14th straight week, a sign of labor market strength that will help fuel U.S. growth. The data indicate employers are retaining workers in anticipation of a pickup in demand this quarter after a slow start to the year. (Bloomberg)
Boeing, which together with European rival Airbus dominates the market for commercial airlines, forecast that emerging economies will drive demand for new planes over the next twenty years. Boeing predicts demand for plane orders for the next 20 years to 38,050 - which will have value of about $5.6trillion. (Financial Times)
Average long-term U.S. mortgage rates jumped this week to their highest levels of the year, with the key 30-year loan topping 4% for the first time since late 2014. (CNBC)
Join us Saturday at 10 for Financial Focus Radio when we will tell you what I am looking for when I take my economic investigations to Greece.
The Federal Reserve has not raised interest rates yet but the free market is headed that way. The 10-year Treasury yield hit an 8-month high, just shy of 2.50% yesterday. This morning, U.S. bond yields are edging higher as did rates on the German bund, now trading at about 1%. (CNBC)
Men's Wearhouse reported adjusted quarterly profit of 54 cents per share, beating estimates by 2 cents, with revenue also above forecasts. The clothing retailer also signed a deal with Macy's to operate tuxedo rental stores. The deal will last 10 years and it will be the exclusive provider of tuxedo rentals to Macy's. (AP)
Qorvo, the chipmaker created when Hillsboro-based TriQuint Semiconductor combined with RF Micro Devices, will join the S&P 500 today. The merger which closed at the beginning of the year, was the largest deal of its kind in the history of Oregon technology. Qorvo now has a market capitalization of $12 billion. It's replacing cigarette maker Lorillard, that is being sold to Reynolds American. (Oregon Live)
Last week, Medford-based Lithia Motors became the third Oregon Company on the Fortune 500 list. It joined Nike and Precision Castparts as one of the largest 500 companies in the nation based in Oregon.
Our local neighborhood is the world, as we live in the era of globalization. Overseas markets bring in more advertising revenue than the U.S. for Facebook , amounting to 51% of global ad sales in the first quarter, with growth in Asia the fastest in the world. (Reuters)
We are clearly in the era of the nanny state with ever increasing regulation. San Francisco has become the first city to require a health warning label on soda ads. Meanwhile, New York City could become the first city to require a warning label on salty menu items. (AP)
Interest rates' sharp jump to their highest level this year caused a sudden surge in mortgage applications. There's a reason: Fear that rates will move even higher. Refinance volume increased 7% new purchase jumped 10% last week. New purchase volume is now 15% higher than one year ago, but refinance volume is off nearly 5%. (Mortgage Banker Association)
It may cost more and be harder to travel lean soon. Airlines are considering whether to copy Lufthansa's move to impose a surcharge on tickets booked via third-party systems. And there is a new push from the international trade group for airlines to shrink the size of the bags allowed as carry-ons. (NBC News/ Reuters)
Yesterday the Oregon Senate rejected three more bills that would create jobs and reduce burdens on small businesses across Oregon. The Legislature has now rejected 22 job creation bills this session. Rejected legislation would have incentivized job creation and reduce barriers to creating family-wage jobs. (NFIB)
You can almost hear the dirge playing. Sears reported a smaller first-quarter loss as it cut advertising, but sales continued to tumble, underscoring the need for a big cash injection. The company plans to spin off 235 Sears and Kmart stores into a real estate investment trust. The retailer, which has lost $7 billion over the past four years, expects to receive about $2.6 billion in proceeds from the sale early in July. (Reuters)
A Taco Bell in Chicago will serve customers beer, wine, and mixed drinks. The restaurant is part of Taco Bell’s rebranding effort, introducing upscale locations, which feature more open kitchens and fancy serving baskets. Boozy drinks will be served only to customers eating inside, and they will come in special cups to distinguish them from regular drinks. (Money)
Asian stocks fell on China inflation concerns, as their consumer price index rose 1.2% last month from the year-earlier, below expectations and down from April. Meanwhile, producer prices remained weak, with a bigger-than-expected fall of 4.6%. (CNBC)
The National Association for Business Economists revised down its expectation for U.S. GDP growth to 2.4% from a previously forecast 3.1%. NABE said "sluggish" conditions in the first quarter spilled over into the second and will drag down economic growth for the year. (AP)
McDonald's global same-store sales fell 3% May. It is the last time the fast-food chain will report on monthly sales. Comparable-store sales in the U.S. were down 2.2% in the month, while sales in Europe rose 2.3%.
In the Asia/Pacific, Middle East and Africa (APMEA) region, sales were down 3.2%. (CNBC)
Japan's long suffering economy revised its economic growth sharply higher in the first quarter. GDP rose an annualized 3.9%, higher than the preliminary reading of a 2.4% increase. (CNBC)
Not only did American Pharaoh break a 37-year drought Saturday, becoming the first horse since 1978 to win racing's elusive Triple Crown, but it was also a financial boon. Forbes estimates the colt could now be worth nearly $50 million in breeding and other monetary rights. (NBC News/Forbes)
Diageo, the world’s largest maker of spirits, is seeing its shares surge on reports Brazilian billionaire Paulo Lemann's buyout firm 3G Capital is considering a bid for the spirits maker. 3G also owns Burger King and Heinz. (Fox Business News)
U.S. worker productivity fell 3.1% in the opening months of 2015, underscoring an economic soft patch marked by weak business investment and disappointing wage gains. The US added 280,000 jobs in May, and the unemployment rate rose slightly to 5.5% (WSJ)
Up to nine more banks are in line for the next round of billion-dollar payments related to mortgages during the financial crisis. The Justice Department and state officials, which already have reaped almost $37 billion from the largest U.S. banks, are now targeting additional U.S. and European banks. Settlements with Goldman Sachs and Morgan Stanley could be finalized as early as later this month. Fines are expected to reach as high as $3bn each. (WSJ)
Yet another huge data theft. The federal government is notifying approximately 4 million employees who have had their personally identifiable information stolen during a massive data breach at the Office of Personnel Management. Early indications are that Chinese hackers are behind the attack. (CNBC)
The trade gap has fallen 19%, the most in six Years. The trade deficit fell sharply last month as the effects of a West Coast port slowdown faded, easing one of the biggest drags on the economy during the opening months of the year.
Dish Network is reported to be in talks to merge with T-Mobile, in just the latest example of traditional television and communications companies fighting for scale as their market share is increasingly eroded by the internet. Rival AT&T is close to wrapping up its own $49 billion deal for Dish rival DirecTV, in a deal will create the country's largest pay TV company. Meanwhile, Charter Communications, which recently announced a $66 billion purchase of Bright House Networks and Time Warner, will emerge as the second-largest cable operator.
All eyes are on Greece and the jobs number today. Greece's creditors have struck a hard line, but recently made some concessions in the outlines of a final deal presented to Athens yesterday. Jobless claims fell 8,000 to 276,000 in the week, slightly better than analyst consensus.
Private sector job creation swung higher in May after a lackluster April, with companies adding 201,000 positions for the month, according to payroll firm ADP. Job creation was skewed heavily toward small businesses in May. Trade, transportation and utilities led the way with 56,000 new jobs, professional and business services were next at 28,000 and construction adding 27,000 jobs. The one blight on the report was manufacturing, which lost 5,000 positions. (CNBC)
This could upset markets. Greece will skip a payment due Friday to the International Monetary Fund if its creditors do not offer a clear plan for aid in exchange for reforms. (Reuters)
You say you can’t afford to save for retirement? Smoking costs the average smoker at least $1.1 million over a lifetime. Alaska had the highest total cost per smoker at a little more than $2 million and South Carolina had the lowest per-smoker costs at almost $1.1 million. Oregon ranked 22nd in cost at about $1.5 million. (USA Today)
Chinese foreign direct investment in the U.S. totaled $12 billion last year, topping $10 billion for the second year in a row. Some Chinese companies are building manufacturing plants, from the ground up, on U.S. soil. They're spending hundreds of millions on new projects and expansions. (Rhodium Group)
U.S. construction spending surged in April to the highest level in nearly 6-1/2 years as outlays increased broadly, pointing to some pockets of strength in the economy. Construction spending jumped 2.2% to an annual rate of $1.0 trillion, the highest level since November 2008. The percent increase was the largest since May 2012. (Reuters)
The pace of U.S. manufacturing growth rose in May, rebounding off its slowest pace in almost two years as new orders and employment rebounded. The Institute for Supply Management (ISM) said its index of national factory activity was 52.8 in May. A figure above 50 indicates expansion in the manufacturing sector. This was the 30th consecutive reading at or above 50. (Reuters)
The employment index returned to expansionary territory after a month of contraction, rising to 51.7 from 48.3 in April. The new orders index had its best month since December, rising to 55.8 from 53.5 in April, while the prices paid index had its best month since October, surging to 49.5 from 40.5 in April. (Reuters)
Bank of America got a win as the Supreme Court ruled that homeowners cannot erase second mortgages through bankruptcy if the homeowners are “underwater, “or, their first mortgage exceeds the home’s current value. The unanimous decision reversed an 11th Circuit ruling that homeowners in Chapter 7 bankruptcy could “strip off” a second mortgage. (ABC)
U.S. stocks come off a positive May that had anything but a positive ending, with the S&P 500 posting losses in six of the last eight sessions. Stocks are moving modestly higher this morning, as investors look ahead to a busy week of economic numbers culminating in Friday's May employment report. (CNBC)
April personal income rose 0.4% and spending is flat, after income was unchanged in March and spending was up 0.5%. (Bloomberg)
A record number of Americans are turning to auto leases as new vehicle prices climb to all-time highs. Experian Automotive found 31.5% of new vehicles financed in the first quarter were leased as consumers try to keep monthly payments as low as possible. (CNBC)
O'Reilly Automotive announced it would add an additional $500 million to its stock buyback program, bringing the auto parts retailer's total authorization to $5.5 billion.
Dollar Tree will sell 330 stores to private equity firm Sycamore partners, in order to smooth the way for regulatory approval of its planned acquisition of Family Dollar. Financial terms were not disclosed.