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Business News Archives for 2016-12


The Consumer Confidence Index hit 113.7 in December. Its highest level since August 2001. The increase in consumer confidence was due solely to increasing expectations which hit a 13-year high. Consumers' assessment of current conditions declined slightly.  Those saying business conditions are "good" was essentially flat at 29.2%. and those saying they are "bad" moved up from 15.2% to 17.3%. Those saying jobs are "plentiful" dipped to 26.9% and those saying jobs are scarce climbed to 22.5%. (The Conference Board)

 

Consumer spending in the final days of the Christmas shopping season offset a slow start.  Early holiday promotions and expectations among consumers that deals would always be available took a toll. Spending over the Thanksgiving weekend in November fell 3.5% from a year ago.  Brick-and-mortar sales in the week ending 12/24 rose 6.5% year-over-year.  November through Christmas Eve retail sales were up 4%.  (Reuters)

 

We should expect this in our consumption culture. More than half of Americans say they don't like at least one of the gifts they got for Christmas. The average cost of that unwanted gift is about $31 or $9.5 billion in total. Only one-quarter exchange the items, 20% regift them, and fewer than 5% donate their them to charity. (CNBC)

 

S&P 500 is up 1 and the NASDAQ is up 11. MSCI International Index is flat.

Oil is down 25 cents at $53.64 a barrel.

Gold is up $2 at $1141 a Troy ounce.



Today marks the start the year's final week of trading.  To prove you can’t judge a book by its cover 2016 stock markets got off to its worst start in history, but is now on pace to end the year with double-digit gains. (CNBC)

 

During the last days of the holiday shopping season consumers shifted their buying to online sources in record numbers. The primary beneficiary of this trend appears to be Amazon. Slice Intelligence found early online purchases going to the e-commerce giant Amazon with a 36.9% share of the market. Best Buy was second with a 3.9% market share followed by Target, with a 2.9%, Wal-Mart, with a 2.7% and Macy's, with a 2.5%. (CNBC)

 

The Index of Consumer Sentiment hit 98.2 in December. That is up from 93.8 in November. That is its highest level since January 2004. The report says 18% of consumers mentioned an expected favorable impact of Trump's policies on the economy. That's twice as high as the prior peak of 9 percent in 1981 when Ronald Reagan took office. (University of Michigan)

 

S&P 500 is up 1 and the NASDAQ is up 5. MSCI International Index is down 0.35%.  Oil is up 21 cents at $53.23 a barrel. Gold is up $10 at $1143 a Troy ounce. 



The Dow Jones Industrial Average retreated further from the elusive 20,000 milestone, losing its drive ahead of the Christmas break.  US stocks are trading without much direction as we get closer to Christmas on very low trading volume.
 
The U.S. economy grew faster than previously thought between July and September, its best performance in two years, buoyed by stronger consumer spending, the government reported Thursday.  The Commerce Department said the economy expanded at a seasonally adjusted 3.5% annualized rate in the third quarter. This is above the government’s prior estimate of 3.2% due to upward revisions in consumer spending and business investment.
 
U.S. jobless claims jumped to the highest level since mid-June, the government said Thursday.  The Labor Department said jobless claims in the week ending Dec. 17 rose a seasonally adjusted 21,000 to 275,000. Economists had expected claims of 258,000.
 
Consumer spending growth in November slowed as incomes stagnated, and following several strong months of spending gains.  Personal incomes were unchanged for the month, and outlays rose 0.2%, the Commerce Department said Thursday.  The government also reported that inflation was unchanged in November. The median forecast among economists in a MarketWatch survey was for a 0.1% monthly increase.



U.S. stocks pulled back slightly on Wednesday as the “Santa rally” that has pushed equities to records stalled for the moment, keeping the Dow Jones Industrial Average just short of the 20,000 milestone.

Existing home sales were 15.4% higher than a year ago, and would have been even higher if there wasn’t somewhat of a housing shortage.  Currently there is only a 4 month supply of houses nationally at the current pace of sales, which is pushing prices higher.  The median price for a single family home nationally is $234,900 which is 6.8% higher than November of 2015.

FedEx posted profit on an adjusted basis of $2.80 per share for its second quarter, up from $2.58 a year earlier but below analysts forecast of $2.90/share. The company saw operating margins slide in its latest quarter, offsetting gains on expanding volumes tied to an e-commerce boom. Shares of the company, up 35% over the past 12 months, fell 3% to $193.49.

7-Eleven beats Google and Amazon to the first regular commercial drone delivery service in the U.S.  7-Eleven, the world’s largest convenience store chain, shared new numbers from its drone delivery experiment today. Seventy-seven customers in Reno, Nev., have now received items ordered from 7-Eleven delivered to their doorsteps via drone.  All 77 flights were from one store to a dozen select customers who live within a mile of the shop. 7-Eleven has partnered with the drone maker Flirtey for its delivery pilot.



Modest stock returns yesterday put the Dow within striking distance of the psychologically important milestone of 20,000, but meager trading and a lack of market-moving events, such as economic data, may provide little impetus for a breakout into the record books. Seasonally low trading volume can make stocks more susceptible to big swings.
Nike shares surged on news the athletic apparel giant topped Wall Street estimates for the quarter. Nike shares rose 3.5% to $53.61. The company reported fiscal second-quarter earnings of 50 cents a share on revenue of $8.18 billion. Analysts surveyed by FactSet had forecast earnings of 43 cents a share on revenue of $8.09 billion.  Results would have been even better if it hadn’t been for the strong US Dollar.
2016 was a banner year for the US economy. Housing prices overall have now fully recovered from their lows during the financial crisis, consumer confidence is up and stocks are at all-time highs.  But Oregon stood out from the rest as the most economically improved state in 2016, according to new data from the Federal Reserve Bank of Philadelphia.  The Beaver State edged out Utah with a 12.43 point jump in its coincident index, a metric showing the current state of economic activity within a particular area.

To satisfy antitrust concerns, Walgreens and Rite Aid will sell 865 Rite Aid stores to Fred’s Pharmacy for $950 million in cash.  “The agreement is being entered into to respond to concerns identified by the (Federal Trade Commission) in its review of the proposed acquisition of Rite Aid by Walgreens Boots Alliance, which was announced in October 2015.  Fred’s operates stores in 15 southeastern states. The deal makes sense for Fred’s to buy some Walgreens operations because the management team at Fred’s knows the Walgreens operations and its real estate quite well. Fred’s CFO Rick Hans was a top finance and real estate executive at Walgreens for more than 25 years and helped develop more than 250 Walgreens stores.

2017 may be the year to travel to Europe as the Euro approaches parity with the US Dollar.  The euro now stands at 1.03 vs the greenback.

With Northwest Quadrant Wealth Management I’m Tyler Simones



U.S. stocks advanced modestly yesterday with investors somewhat reluctant to make big bets in a preholiday week while the main benchmarks were sitting near all-time highs set last week.  Trading volumes were thinner than usual, with the New York Stock Exchange reporting volume at 60% of normal.

In her first speech after raising interest rates last week for only the second time this decade, Federal Reserve Chairwoman Janet Yellen said signs of a healthy job market abound, including steady job creation, a low layoff rate and more job openings. But Yellen also noted the economy is growing more slowly than in past recoveries and productivity growth “has been disappointing.”

Shares of Walt Disney were up 1.3% after “Rogue One: A Star Wars Story” hauled in an estimated $155 million in the U.S. and Canada at the box office over the weekend. Ticket sales were the second-biggest ever for a December opening.

Top executives of hedge fund Platinum Partners were arrested yesterday morning and charged with defrauding investors in one of the biggest such cases since Bernie Madoff’s Ponzi scheme.  As recently as this fall, Platinum told investors it oversaw more than $1 billion scattered in eclectic investments like loans to bankrupt companies and thinly-traded pharmaceutical stocks. It boasted one of the steadiest performance track records in the hedge-fund industry, with no down years for its funds.  More proof that if it sounds too good to be true it probably is.

President-elect Donald Trump's ambitious plans to revive exports, return jobs to the United States and increase oil drilling are running up against a home-grown threat:  The surging U.S. dollar.  Since the Nov. 8 election, the dollar has shot up 5 percent. An index that tracks the dollar against other major currencies reached a 14-year high after the election.

With Northwest Quadrant Wealth Management I’m Tyler Simones



The Dow is on pace for a sixth weekly gain in a row. The S&P and Nasdaq are at breakeven for the week. (CNBC)

The National Association of Home Builders Housing Market Index jumped to 70 in December, the highest level since July 2005. Fifty is the line between positive and negative sentiment. It stood at 60 one year ago. Of the index's three components, current sales conditions increased 7 points, sales expectations in the next six months rose 9 points and buyer traffic rose 6 points. (CNBC)

The Consumer Price Index rose 0.2% in November. In the 12 months through November, the CPI increased 1.7%, the biggest year-over-year gain since October 2014. Last month, gasoline prices rose 2.7% and food prices were unchanged for a fifth straight month. Food consumed at home declined for a seventh consecutive month. (Reuters)

Join us this weekend for Financial Focus Radio when we will talk health insurance with our trusted expert Don Klippenes of Health Insurance Strategies.

S&P 500 is up 6 and the NASDAQ is up 11. MSCI International Index is flat.

Oil is up 30 cents at $51.30 a barrel.

Gold is up $6 at $1135 a Troy ounce.

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.
 



The Federal Reserve made its second interest rate increase in a decade yesterday and it is having an impact. The dollar index is reaching a 14-year high. Gold is at a more than 10 month low. The 10-year Treasury yield topped 2.6% this morning. (Reuters)

Retail sales rose in November by 0.1%. Sales were up 3.8% from a year ago. Auto sales fell 0.5%, the largest decline since March. Sales at building material stores rose 0.3%. Sales at online retailers gained 0.1% and sales at restaurants and bars increased 0.8%. (Reuters)

Producer prices rose 0.4% in November, its biggest increase in five months. In the last 12 months through October, PPI rose 1.3%.  That is the biggest annual gain since November 2014. A 0.5% increase in the cost of services accounted for more than 80% of the rise in PPI last month. Energy prices fell 0.3%, wholesale food prices rose 0.6% and health care costs gained 0.2%. (Reuters)

Shares of Mondelez, makers Ritz Crackers, Tang, Trident gum and Chips Ahoy cookies is jumping on a reports that Kraft-Heinz is planning to acquire the snack giant. (Bloomberg)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.
 



This could be the market mover of the day.  The Federal Reserve will tell us 11 am if they will raise interest rates as expected.  It will be followed by chair Janet Yellen's news conference. The Dow stands less than 90 points away from the 20,000 level.  The Dow, S&P 500, and Nasdaq all posted record closes yesterday. (CNBC)

IBM CEO Ginni Rometty says the company plans to hire 25,000 employees in the next four years in the United States. (Reuters)

As if they did not have enough trouble sorting the scandal of opening 2 million fraudulent client accounts …… federal regulators say Wells Fargo would damage financial markets if it were pushed to bankruptcy in a financial meltdown. The feds have imposed restrictions on the bank to protect the system.  The company must redo its "living will" for a third time. (Reuters)

11 days till Christmas and online shopping increases are straining the system.  The United Parcel Service and FedEx are struggling to keep up with holiday shipping volumes that have exceded expectations, delaying the delivery of some of the millions of online orders. (WSJ)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.



Yesterday the Dow inched closer to the 20,000-level posting another record high. The S&P 500 and Nasdaq, posted their first drops in seven sessions. The Federal Reserve starts a two-day meeting today, and they are expected to raise interest rates for only the second time in about a decade. (CNBC)

Costco members have opened 1 million credit card accounts since the launch of the new co-branded Visa cards in June. Costco reported 730,000 sign-ups for the new cards in September. Some 20,000 to 40,000 of the 1 million new accounts came in the form of brand-new Costco members. Costco reported sales of $28.1 billion for the quarter ended November 20th. An increase of 3.2% YOY. That equaled a profit of $545 million. Up 14% from last year. (Puget Sound BJ)

With just 12 days till Christmas shoppers are coming down to the wire.  If you are a last-minute shopper Wal-Mart is here to help.  They are offering free in-store pickup of online orders placed by 6 p.m. local time on December 23rd.  They also have a dedicated website to view last-minute gift available gift ideas at their local store. (CNBC)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.



Will the Trump rally turn itself into a Santa Claus rally?  The Dow, S&P 500, and Nasdaq all finished higher every day last week.  That is the first time that's happened in 5-½ years. (CNBC)

The Federal Reserve starts its two-day meeting tomorrow, and are widely expected to increase interest rates a ¼ of a percent. They last hiked rates in December 2015.  That was the first time they raised rates in more than nine years. (Reuters)

The number of car owners underwater or upside down has hit a record 32% according to Edmunds.com. The lowest the underwater percentage was 13.9% in 2009. The previous high was 29.2% in 2006. The average new car loan is 68 months, according to Experian Automotive. Subprime borrowers, generally those with FICO credit scores lower than 600 are borrowing over an average six years.

The University of Michigan Index of Consumer Sentiment hit 98 in December up from 93.8 in November. The highest level since January 2015. (AP)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.



A gain today by the S&P 500 would give it a six-day win streak, its longest since June 2014. The Dow is on track to wrap up its fifth-straight weekly gain for the first time since March. (CNBC)

I guess this is the ultimate cord cutting.  Flight regulators are considering lifting restrictions on phone calls during commercial flights. Allowing airline passengers to make regular calls while flying. (WSJ)

With all the snow this morning this is an apropos earnings report. Vail Resorts reported a loss of $62.6 million in its latest quarter. The ski resort operator had revenue of $178.3 million. Vail Resorts stock price has climbed 26% in 2016. (AP)

Wells Fargo, embroiled in a scandal where employees opened approximately 2 million fraudulent accounts without client knowledge, has chosen four of its board of directors to lead an internal investigation of what happened. (CNBC)

Join us this weekend for Financial Focus Radio.  This week we will talk about if you should be worried about all time highs in the markets.   

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.
 



U.S. stocks edged up in volatile trade yesterday, with the Dow Jones Industrial Average closing at another record level, as the theme of rotational buying into new leaders such as financials and dividend-rich telecommunication shares continued. The market’s momentum, however, was subdued as investors appeared to trade cautiously after the blue-chip’s gauge notched an all-time high in the previous session.

It’s December which means the big banks on Wall Street are making their forecasts for the stock market in 2017.  Before you listen to these forecasts you should know that you have the same chance about being right about what stocks will do next year as the supposed experts.  Less than 20% of the forecasts of the supposed experts are correct about where stocks will end next year, so stop listening to them.

There was a large surge in the productivity of U.S. companies and employees in the third quarter.  Productivity rose at an annual 3.1% pace in the three months covering July through September.  Additionally Unit-labor costs rose .7% in the 3rd quarter which could spark the inflation flame.
Shares of Boeing were lower Tuesday, after President-elect Donald Trump tweeted that an order for the aerospace giant to build a new Air Force One should be canceled because of rising costs. Just prior to the tweet, the stock was trading unchanged. "Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion. Cancel order!"  Since becoming the President Elect Trump has sent shares of publicly traded companies both higher and lower based on tweets about the companies.

With Northwest Quadrant Wealth Management I’m Tyler Simones.



US Stocks finished at another record high yesterday as solid economic data offset concerns about Europe’s stability in the wake of a rejection of Italy’s vote on Sunday to reform existing constitutional rules.

The broader stock market rose after a survey showed that the services side of the economy grew at its fastest pace in November in a year. The Institute of Supply Management nonmanufacturing index climbed to 57.2 last month. Any reading over 50 indicates economic expansion.

Amazon.com announced yesterday it has opened a brick-and-mortar grocery store in Seattle without lines or checkout counters, kicking off new competition with supermarket chains.  Amazon Go, the online shopping giant's new 1,800-square-foot store, uses sensors to detect what shoppers have picked off the shelf and bills it to their Amazon account if they do not put it back.  The store marks Amazon's latest push into groceries, one of the biggest retail categories it has yet to master. The company currently delivers produce and groceries to homes through its AmazonFresh service.  Shares if Amazon traded $19 higher on the news.

Some 78% of U.S. households will display Christmas trees this year, an American Christmas Tree Association (ACTA) study found. The xmas tree association found that the average price for a natural tree is on the rise; it was $50.82 in 2015 — a 22% increase from 2014 and a 28% increase from 2008. These prices have increased over the past five years and may spike higher this year due to droughts and tree shortages after growers have left the market.  For specialty and exotic kinds of trees, some people are shelling out as much as $1,000, including delivery and set up. In 2015, $1.32 billion was spent on real trees — 32% of which were cut down and purchased from tree farms and 26% were bought from tree lots and other stores.

With Northwest Quadrant Wealth Management I’m Tyler Simones



The Dow Jones posted its fourth straight weekly gain last week. But the S&P 500 and Nasdaq broke their win streak, with the tech laden Nasdaq down 2.7% percent for the week. (CNBC)

The world bond markets have been getting routed since the election, as bond mutual funds marked their heaviest outflows in three and a half years. For the week bond mutual fund outflows totaled $4.4 billion. That means your investment in bonds may be taking a hit. (Reuters)

Big Lots reported third-quarter profits of $1.4 million, after reporting a loss last year. The discount retailer had sales of $1.11 billion. Big Lots shares are up 32% in 2016. (AP)

This is one reason we think the Dow is a flawed index. The Dow Jones Industrial average has gained about 1,200 points over the past month. Almost half that increase has been because of just three stocks. Those are Goldman Sachs up 26.5% over the past month and has added about 320 points to the Dow. UnitedHealth, up 15.7% and has added 150 points onto the 30-stock index. Caterpillar's up 17.3% adding 95 points to the Dow.  Their contribution is oversized due to their high share prices. The Dow is a price-weighted index, hence the move by a $223 share of Goldman Sachs impacts the Dow by almost 10 times more than the same percentage-sized move in $29 stock like Cisco. (CNBC)

S&P 500 is up 10 and the NASDAQ is up 21. MSCI International Index is up 0.69%.

Oil is up 37 cents at $52.17 a barrel.

Gold is down $7 at $1171 a Troy ounce.

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.



The Department of Labor says the US economy added 178,000 jobs in November.  The private sector added 156,000 jobs while state and local government added 22,000. Unemployment rate dipped to 4.6%, lowest since August of 2007.

The U.S. manufacturing index hit 53.2 in November, up from 51.9 in October. That is a seven-month high.
(Institute for Supply Management)

Construction spending increased 0.5% in October to $1.2 trillion. Construction spending is up 3.4% from a year ago. Private construction spending projects slowed 0.2%.  Public construction spending jumped 2.8% rising for a third straight month. (Commerce Department)

Announced layoffs in November was 26,936 jobs, the lowest pace of the year. November layoffs were 12% less than the prior month and down 13% year over year. Year to date companies have announced 493,288 layoffs, down 5.5% from 2015. The retail sector saw the heaviest job cutting with 4,850 announced layoffs mostly from the bankruptcy of American Apparel. (Challenger, Gray & Christmas)

Join us this weekend for Financial Focus Radio when we will talk about what you should do with your bonds as interest rates rise.

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.



November is in the books and all three major U.S. indexes recorded sharp monthly gains. The Nasdaq and S&P posted their best month since July, while the Dow had its best month since March. (CNBC)

Those signing contracts to buy existing homes rose 0.1% in October over the prior month. The index was 1.8% higher than October of 2015. Demand is high but supply is weak, down - from 2015 levels. Pending home sales in the West rose 0.7% month-over-month and is up 2.5% annually. (National Association of Realtors)

The nations consumer spending increased in October by 0.3%. Consumer spending accounts for 70% of U.S. economic activity.  Inflation continues gain steam with the personal consumption expenditure (PCE) price index up 0.2%. In the last 12 months the PCE index is up 1.4%.  Personal income was up 0.6%. Wages and salaries were up 0.5% for a second straight month. Savings increased to $860.2 billion That was the highest level since March 2016. (The Commerce Department)

Dollar General reported third-quarter profits of $235.3 million on sales of $5.32 billion.  Both results missed Wall Street expectations. Dollar General shares are up nearly 8% in 2016 (AP)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.
 


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