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Business News Archives for 2017-03


A federal judge says Wells Fargo must face a lawsuit holding it responsible for investor losses stemming from its mortgage-backed securities sales. Investors may pursue claims alleging breach of fiduciary duty. (Reuters)
 
DuPont will divest part of its crop protection business to FMC Corp, while acquiring FMC's health and nutrition business. DuPont will get $1.6 billion to compensate for the difference in the value of the assets. The deal is part of DuPont's commitment to European regulators to win approval for its planned merger with Dow Chemical. (CNBC)
 
GDP growth for the fourth quarter of 2016 was revised slightly higher to 2.1%. The upward revision was mainly driven by a better picture of consumer spending. The first estimate of GDP for the first quarter of 2017 will be released on April 28, with expectations tracking to another quarter of near 2% growth. (LPL Research)
 
Initial claims for unemployment insurance for the week showed a decrease of 3,000 from the prior week. Claims remain comfortably below 300,000, which is generally associated with a healthy labor market. (LPL Research)
 
Join us this weekend for the Financial Focus Radio Show when we will tackle this question – “Is volatility back?”
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.
 



U.S. stocks posted broad-based gains Tuesday, snapping its eight-day losing streak, as investors cheered better-than-expected economic data.  Attracting the most attention was a reading of consumer confidence in March, which soared to the highest level in more than 16 years. Separately, U.S. house prices roared to their highest in nearly three years as demand remains brisk.

U.S. house prices roared to their highest in nearly three years as demand remains hot, especially in the west.  The S&P/Case-Shiller 20-city index rose 5.7% in the three-month period ending in January compared to the same period a year ago, an acceleration from its 5.5% yearly increase in December. The 20-city index was up 0.2% for the month, or a 0.9% gain when seasonally adjusted.

Yesterday BlackRock the world’s largest money manager said it would overhaul its actively managed mutual fund business, cutting jobs, dropping fees and relying more on computers to pick stocks in a move that highlights how difficult it has become for humans to beat the market.  The world's biggest money manager has faced active stock fund withdrawals and the revamp is its biggest attempt yet to engineer a turnaround.

Oregon and North Carolina may be sneaker blue bloods thanks to Phil Knightand Michael Jordan, but the University of South Carolina has the biggest footwear and apparel deal among the Final Four teams in the men’s college basketball tournament.  South Carolina will get roughly $8 million in cash and equipment from Under Armour this year, including roughly $4 million in cash and $4 million in gear.

With Northwest Quadrant Wealth Management I’m Tyler Simones




 



U.S. stocks overcame steep losses yesterday but the Dow and S&P 500 still closed lower as investors reassessed the prospects for President Donald Trump’s ambitious economic agenda after a Republican plan to repeal and replace Obamacare was scrapped last week.  The Dow Jones Industrial Average marked its longest losing streak since August 2011 with eight straight declines.


Kudos to Sears Holdings Corp. for finally admitting what everyone already knew: it's almost dead.  Sears indicated in its newly filed annual report that "substantial doubt exists related to the company's ability to continue as a going concern." Sears' cash position has melted from a high point of $1.7 billion for the 2009 calendar year to a mere $286 million to close out 2016.  The company hasn't generated cash flow from its operations since 2006.

New vehicles in March were sitting on the dealer’s lot for about 70 days, the longest amount of time for any month since July 2009, according to research firms J.D. Power. During previous months, new cars hovered in the lot around 65 days. It takes dealers about a week longer to sell new cars than it did this time last year, said Michelle Krebs, a senior analyst at used and new car sales site Autotrader.com.
 

With Northwest Quadrant Wealth Management I’m Tyler Simones



US Stocks were 1.5% lower last week the worst week since September after the failure of a vote on the Presidents health care bill.  The difficulty over the health-care bill is likely to serve as a wake-up call for investors who had bid up stocks in anticipation of more business-friendly and pro-growth policies from Trump.

Starbucks held their annual meeting last week where they announced plans to open 12,000 new stores globally over the next five years that will result in more than 240,000 jobs worldwide. That includes 3,400 stores, representing 68,000 jobs, in here in the U.S.  This was the last annual meeting of the long-time CEO Howard Schultz who has done a fabulous job running the company.

When Amazon began offering free two-day shipping to Prime members, that fast shipping time became the new expectation for many customers who were previously accustomed to waiting much longer for their packages.  Now, the Seattle-based e-commerce giant is setting the bar even higher with initiatives such as Prime Now and Amazon Flex, which ship goods to you in two hours and in some cases promise one-hour delivery.  It is getting more and more difficult for brick and mortar retailers to compete.

The wealth and number of the super-rich fell for the first time since the Great Recession. The number of the world’s billionaires fell by 3% last year to 2,397, according to the “Billionaire Census.” Some 283 people or 10% of total billionaires lost their billionaire status in 2016

With Northwest Quadrant Wealth Management I’m Tyler Simones



Weekly jobless claims ticked higher, but the labor market remains healthy. Initial claims for unemployment insurance for the week showed an increase of 15,000 from the prior week to 258,000. Claims remain below 300,000. This marks the 80th straight week below 300,000, the longest stretch since 1970. (LPL Research)
 
New single-family home sales moved to a seven-month high in February, increasing 6.1% to an annual rate of 592,000 units. Sales are up 12.8% year-over-year. At last month’s sales pace, it would take 5.4 months to clear the supply of houses on the market, down from 5.6 months in January. The median price for a new home fell 4.9% to $296,200 from a year ago. There was a 3.7% drop in sales of existing homes in February.  (Reuters)
 
Are they contenders for the market timers’ hall of fame? That empty room in Paducah Kentucky. Some 34% of mutual fund managers say stocks are "overvalued," according to a Bank of America survey. That's the highest level in the 17-year history of the survey. Some 80% of fund managers polled say the USA is the most overvalued part of the world. (CNNMoney)
 
Join us this weekend for the Financial Focus Radio Show when we will tackle this question – “Is the market ready to tumble?”
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.
 



Nike reported earnings of 68 cents per share for the quarter on total sales of $8.4 billion. Revenue for the Nike brand was up 7%. Competition from Under Armour and Adidas are increasingly pressuring Nike's business. Particularly in the U.S. (CNBC)
 
Rising housing costs are shrinking demand for home loans or pushing buyers toward cheaper, adjustable-rate mortgages. Total mortgage application volume fell 2.7% last week and is 12% lower than a year ago. Home prices continue to rise far faster than incomes. As a result adjustable-rate loan applications have doubled to 9% of all applications since the election. That is the highest level since October 2014. Refinance applications are down 26% from a year ago. Loan applications to purchase a home are up 5% from a year ago. (Mortgage Bankers Association)
 
This could be the start of the end game for a once iconic retailer. Sears suppliers are reducing shipments and asking for more advantageous payment terms worried the company is about to fold.  This follows the retailer's statements in its annual report expressing doubts about its ability to stay afloat. (CNBC)
 
AT&T and Verizon have joined a growing number of companies pulling their advertising from Google over placements on objectionable content. (WSJ)
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.



The streak has ended. The S&P 500 fell over 1% yesterday for the first time in 109 consecutive days. That falls short of the 110-day streak in early 1995, with the 112-day streak in 1985 next on the list. You have to go back to the 1960s for a longer streak. (LPL Research)

The University of Michigan’s Consumer Sentiment Index reached its highest level since 2000, hitting 97.6 in March, up from 96.3 in the previous month.

Leading economic indicators remain strong. The Conference Board's Leading Economic Index rose 0.6% in February. The largest positive contributor for the month was the ISM new orders index, reflecting recent gains in manufacturing. The index accelerated to a 3.1% gain year over year, its highest growth rate since August 2015. The leading economic indicator index continues to point to a low chance of a recession in the next year. (LPL Research)

A third of all the J.C. Penney department stores in Oregon will close this summer as the company mothballs140 stores nationwide. Five of Oregon's 14 J.C. Penney locations will be closed. The Oregon stores closing are:
•Astoria
•Grants Pass
•La Grande
•Pendleton
•The Dalles

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



Business inventories increased by 0.3% in January from the previous month. Sales increased 0.2%. Inventories rose at retailers by 0.8% while sales increased 0.5%. Inventory growth was just 0.2% for the manufacturing sector. (Commerce Department)

Improving economic data points to more rate hikes. Data on initial claims for unemployment insurance, housing starts for February, and manufacturing for March were all solid and reinforced the Fed's view that the economy is improving. Unemployment claims remain near 43 year lows and have dropped by 19,000 over the past six months. Claims would have to rise by at least 75,000 over six months to indicate a recession. (LPL Research)

Heavy equipment manufacturer Caterpillar has hired former U.S. Attorney General William Barr to help the company with an ongoing government investigation of its import and export practices. (Reuters)

British American Tobacco says demand for its "glo" tobacco heating device outstripped supply in its Japan test marketing.  Heat but not burn tobacco is rapidly gaining popularity in Japan. Philip Morris International has more than doubled the supply of its no burn devices but it was not enough to cover the demand. (Reuters)

The S&P 500 is up 1 and the NASDAQ is up 4.  The MSCI international index is lower.

Oil is up 25 cents at $49.01 a barrel.

Gold is up $2 at $1229 a Troy ounce.

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

 



US household net worth grew to a record $92.8 trillion in the last quarter of 2016, due in large part to gains in the stock market, according to the Federal Reserve’s quarterly financial accounts report.

Producer price inflation slowed in February, but the trend pointed to a steady building up of inflation pressures. The producer price index climbed 0.3% last month. In the last 12 months, the PPI is up 2.2%. (Labor Department)

The spread between high-yield corporate bonds, also known as junk bonds, and U.S. Treasury yields widened from 3.40% to 3.80% this week. Much of this move can be attributed to increased supply as junk bond issuers try to get ahead of the Fed rate hike. (LPL Research)

Does a lack of volatility mean complacency? The S&P 500 traded in a range of only 0.25% on Monday, the smallest range this year and one of the tightest ranges ever going back 50 years. Small ranges are nothing new, as the S&P 500 hasn't traded in a daily range of more than one-percent for 60 consecutive days, an all-time record. Additionally, the S&P 500 hasn't closed down by 1% or more for 105 consecutive trading days, tying the longest streak since late 1995. (LPL Research)

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



Oregon’s largest employer Intel has agreed to buy Israeli driverless technology firm Mobileye for $15.3 billion. That is a $63.54 per share cash deal.  Mobileye was founded in 1999. Mobileye employs 600 people. (Reuters)

Small business optimism is near its highest level in 43 years, according to the February National Federation of Independent Business Small Business Optimism Index. The Index fell 0.6 points in February to 105.3. Three of the ten components increased, six declined modestly, and one was unchanged. Half of business owners expect better business conditions in the coming months. The job openings index reached its highest level since December 2000, but owners reported difficulty finding qualified workers. Twenty-six percent of small business owners reported raising compensation, one of the highest readings since February 2007. (NFIB)

U.S. shale oil producers will increase their output by 109,000 barrels a day in April, according to the Energy Information Administration. That will raise total output from the shale oil basins to 5 million barrels a day. Shale drilling started to recover in the second half of 2016. Oil prices hovered near three-month lows on Tuesday (CNBC)

The 10-year Treasury yield hit 2.61% yesterday, the highest level in over two years on expectations the Fed will raise interest rates this week. (WSJ)

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

 



Big jobs report says the US economy added 235,000 jobs in February.  The private sector added 227,000 and government grew by 8,000. Unemployment rate stands at 4.7%.  (BLS)

There are 5.5 million open jobs in the U.S. economy. The labor force participation rate remains in long-term decline due to demographic factors after peaking in the early 2000s. The participation rate has moved up over the past few years after hitting a 35-year low in mid 2015. At 500,000 the number of discouraged workers in January 2017 was nearly 900,000 lower than at the peak in late 2009/early 2010, when there were 1.3 million discouraged workers. (LPL Research)

It has been a long slow decline, RadioShack has filed for bankruptcy for the second time in two years. The company is closing 200 stores and evaluating the remaining 1,300. No list of stores to be closed has been released. (AP)

Bottled water surpassed soft drinks to become the largest beverage category by volume in the US in 2016. Bottled-water consumption reached 39.3 gallons per capita last year, while carbonated soft drinks slipped to 38.5 gallons. (Beverage Marketing Corp)

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



Eight years ago, the S&P 500 closed at its lowest level of the financial crisis, marking the end of the worst bear market since the Great Depression, down 57% from the highs. Going back to WWII, this is now the second-longest bull market ever at 97 months, with only the bull market during the 1990s longer. The S&P 500 is up 250% since the 2009 lows. This ranks as the third-best return during a bull market since WWII, with only the 1950s and 1990s bull markets up more. (LPL Research)

U.S. employers cut 36,957 jobs in February, a 19% decline from the month earlier.  That is a 40% year-over-year decrease. According to Challenger, Gray & Christmas, employers said they would hire 166,266 workers in the first two months of 2017, the highest January-February on record. The retail sector once again planned the most cuts. The biggest cuts came from J.C. Penney, which announced it is laying off 5,500 employees.

Make that 101. The S&P 500 might have closed lower for the third consecutive day yesterday, but it has now gone 101 days in a row without a one percent close lower. That is the longest streak since 105 in late 1995. Interestingly, that year had two streaks of more than 100 days. Taking another look at back-to-back losses, the S&P 500 had gone 25 trading sessions without two red days in a row, the longest run since 25 last summer. (LPL Research)

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



Dish will be part of the S&P 500 as of next Monday. The satellite television company replaces Linear Technology, which is being acquired by chipmaker Analog Devices, another S&P 500 company. (CNBC)

The National Federation of Independent Business February 2017 Jobs report is out. It finds small business owners are eager to hire, but are struggling to find qualified workers. 52% of small business owners either hired or tried to hire in February, with 44% saying they found few or no qualified applicants.

In February, China had its first trade deficit in three years. A construction boom moved imports higher than expected.  This gives support to the view China's economy is picking up. (Reuters)

Total mortgage application volume rose 3.3% last week, but volume is 18% lower than a year ago. Refinance volume is off 34% annually. The average interest rate for 30-year fixed-rate mortgage is 4.36%. Buyers are struggling to afford the homes and are turning to adjustable-rate loans, which offer lower interest rates. Last week the ARM share of mortgage applications reached its highest level since 2014. (Mortgage Bankers Association)

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



Non-manufacturing output grew in February for the 86th consecutive month, per the Institute of Supply Management. The institute's non-manufacturing index hit 57.6 in February, up from the previous month. The non-manufacturing business activity index increased to 63.6, the highest reading since February 2011.

We have not built a new oil refinery in this country since the early 1980’s.  In a helpful move, Exxon Mobil, will spend $20 billion, over the next several years, on refineries and petrochemical plants in the Gulf of Mexico region. (WSJ)

Proof taxes have economic and employment impacts. Philadelphia's soda tax has led to a big decline in soft-drink sales. Supermarkets have seen Coca-Cola sales fall 30% to 50% and Pepsi has seen a 40% in sales in the taxing area and a 10% to 15% increase outside the city.  This has led to Pepsi cutting 80 to 100 jobs in the area. That is about 20% of their beverage workforce. (CNBC)

Dick's Sporting Goods stock price fell more than 6% yesterday. Fourth quarter profits fell 30% compared to the same period a year ago. Revenue for the quarter hit $2.5 billion, compared with $2.2 last year. Shares of Dick's are up 18.7% in the last 12 months. (Market Watch)

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



The S&P 500 was up 0.6% last week, which was the first six-week win streak since late 2015. In fact, it was the fourteenth six-week win streak since the March 2009 S&P 500 lows. Looking at the previous 13 times this occurred, the S&P 500 was higher on average by 0.8% a month later and positive in nine of the 13 instances. (LPL Research)

Other than the February employment report, due out Friday, it's a relatively quiet week for U.S. economic data. It's also the unofficial quiet period for the Federal Reserve ahead of the March 14-15 Fed meeting. The overseas calendar is chock full of potentially market-moving events, including the EU leaders summit, a potential House of Lords vote on Brexit, the European Central Bank meeting, and China's National People's Congress, where Premier Li will provide government targets for the Chinese economy in 2017. (LPL Research)

Big Lots, ticker symbol BIG, reported a quarterly profit of $90.1 million. The discount retailer had sales of $1.58 billion in the period. For the year, the company reported profits of $152.8 million, or $3.32 per share. Revenue was reported at $5.2 billion. Big Lots stock is up 4% in 2017 and up 26% in the last 12 months. (AP)

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



Big down day yesterday.  If the Dow and S&P 500 fall today it would be the first back-to-back loss since January. But we are headed for another positive week. (CNBC)

 

Anheuser-Busch InBev, the world's largest brewer, is giving thought to more cost cutting and will not pay bonuses to executives after a weak end of the year and a slump in Brazil. (WSJ)

 

Costco missed sales and profit expectations in the latest quarter sending shares lower by almost 5%. There is a price war in the industry as Wal-Mart is running a new price-comparison test to force lower prices. Costco same-store sales rose 3%. Costco will raise its annual fees by $5 to $60 for Goldstar and business members and by $10 to $120 for executive members.  Prices will rise on June 1st. Membership fees account for about 72% of Costco's operating income. Costco profits fell 6% to $515 million, or $1.17 per share, in the latest quarter. (Reuters)

 

Caterpillar shares sold off 4% yesterday on news that federal authorities raided three of its facilities. The company says it believes the searches were related to a Swiss subsidiary and how they account for sales and taxes. (AP)

 

Join us this weekend for Financial Focus radio when we will get you up to speed on a crazy week.

 

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



U.S. consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.2% in January. Consumer spending increased at a 3.0% annualized rate in the fourth quarter. (Commerce Department)

In January, the PCE, also known as the personal consumption expenditures price index, climbed 0.4%.  That is the largest gain since February 2013. Over the last 12 months, the PCE is up 1.9%. That was the biggest year-on-year gain since October 2012. (CNBC)

Paychecks were a little heavier in January as personal income increased 0.4%.  But income at the disposal of households after inflation and taxes, fell 0.2%. (Commerce Department)

Hershey, maker of Hershey's Kisses and Reese's Peanut Butter Cups is cutting 15% of workforce. At the end of 2016 the company had 16,300 full-time employees worldwide. (Reuters)

Make that 51 in a row. The S&P 500 has now gone 51 consecutive days without trading in a 1% or greater intraday range. That is far and away the most ever, with 34 consecutive days in 1995 the previous record. The S&P 500 hasn't closed down 1% for 96 straight days, the longest since 105 in 1995. Lastly, the S&P 500 has closed within 1.5% of the all-time high for 76 consecutive days, the longest such streak going back 45 years. (LPL Research)

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



The Trump rally just keeps rolling. The numbers for February are in and the Dow added almost 4.8%, the S&P 500 climbed 3.7%, and the Nasdaq jumped 3.75%. It was the fourth month in a row all the indices moved higher. (CNBC)

Who said being President was not profitable? Penguin Random House is paying former President Barack Obama  and First Lady Michelle Obama, $65 million for two separately written memoir books.  That sets a new record for U.S. presidential memoirs. (FT)

Costco is expected to raise its membership fees by nearly 10% in the next couple of months. The fee hike could be announced Thursday along with the company's second-quarter earnings report.  The company recently increased its membership fees by 10% in Taiwan, Korea, Japan, Mexico, and the UK. (Business Insider)

Home-improvement retailer Lowe's quarterly profits jumped 34% to 86 cents per share.  That came on sales rising 16% to $15.8 billion. Same-store sales jumped 5.1%. (Investor Business Daily)

Best Buy, the No. 1 U.S. electronics retailer, reported a decline in holiday-quarter same-store sales. Best Buy's same stores sales fell 0.7% in the fourth quarter. Best Buy's net revenue fell 1% percent to $13.48 billion. (Reuters)

S&P 500 is up 17 and the NASDAQ is up 33. MSCI International Index is higher.

Oil is up 25 cents at $54.23 a barrel.

Gold is down $12 at $1242 a Troy ounce.

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


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