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Business News Archives for 2017-04


Signed contracts to buy existing homes slipped 0.8% in March according to the National Association of Realtors, but is 0.8% higher compared to March of 2016. Home prices are up nearly 7% compared to a year ago with 42% of homes sold at or above list price in March.

New orders for U.S. capital goods rose 0.2% last month according to the Commerce Department.  Last month, orders for machinery slipped 0.2%, but shipments increased 0.7%.

Initial jobless claims for the week rose 14,000 to 257,000. The four-week moving average of claims fell 500 to 242,250 pointing toward a gradual tightening in the labor market. Overall, the data is still consistent with a healthy labor market and continued economic growth. (LPL Research)

Industrials have produced the biggest upside surprise of all 11 S&P sectors this earnings season. Overall, a solid 77% of S&P 500 have beaten on the bottom line, and 63% on revenue.  First quarter earnings are tracking to a 11.8% year-over-year increase. About 320 S&P 500 companies are still left to report first quarter results. (LPL Research)

Join us this weekend for Financial Focus radio when we will talk with a professional fiduciary.

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



Two trading days left in April, and the S&P 500 is on track for its fifth positive month out of the past six, and the Nasdaq is on track for its sixth consecutive monthly gain. (CNBC)

We hear a lot about the tightening labor market and pressure on wages. One company, Tyson Foods is considering raising wages for its poultry plant workers, on top of a 3% to 3.5% wage hike that it gave workers in November. (CNBC)

Trump's tax plan is just the start of negotiations. The Trump tax plan includes a 15% corporate tax rate, a 10% rate on repatriated profits, and a 15% maximum rate for pass-through businesses. Tax reform could boost S&P 500 corporate profits meaningfully, potentially by 5% or more beginning in 2018. (LPL Research)

The farm and ranch oriented Tractor Supply posted a first-quarter profit of $60.3 million or 46 cents per share. The company had revenue of $1.56 billion in the period. Tractor Supply shares are down 14% in 2017. (AP)

Under Armour posted its first-ever loss of $2.3 million or 1 cent per share. Revenue was $1.12 billion up 7% from last year. (CNBC)

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



With 95 S&P 500 companies having reported, S&P 500 earnings for first quarter 2017 point to an 11.2% year-over-year increase. The early upside has been driven largely by financials, which are tracking to a 19.0% year-over-year increase. Industrials have also surprised to the upside thus far. Conversely, since earnings season began, first quarter earnings estimates have been cut for the consumer discretionary, energy, and telecom sectors. (LPL Research)

Leading indicators rise for seventh consecutive month. The Conference Board's Leading Economic Index (LEI) pushed 0.4% higher in March. Eight of 10 indicators increased in March, led by contributions from strong new manufacturing orders. The LEI has climbed 3.5% year over year, a rate that has historically been associated with low odds of a recession occurring within the next year. (LPL Research)

The toymaker Mattel has a huge problem. Fewer kids want to play with the company's Barbie and American Girl dolls, and Fisher-Price toys. Their stock is down to its lowest level since October 2015. Sales were down 15% last quarter.  Barbie sales plunged 13%, American Girl sales were down 12%, and the company's Mega Bloks, sales plummeted 38%. (CNNMoney)

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



Stocks are sharply higher after centrist French presidential candidate Macron won a plurality in in Sunday's election. Anti-EU candidate Le Pen came in second. The final election is set for May 7th. The French stock market is up about 5%, the euro is at a five-month high, gold and bond prices are lower. (CNBC)

Eurozone PMIs hit 6-year highs. Purchasing Manager Index (PMI) data in the Eurozone came in a 56.7 for March (a headline number above 50.0 indicates expansion), besting analysts' expectations and reaching levels not seen since 2011. Both manufacturing and services saw improvements, with France and Germany, the group's two largest components, driving the increases. Employment growth rates also hit levels not seen in almost a decade; a particularly important sign for the European Central Bank (ECB), which referenced job creation as a key measure of the success of its stimulus policies. (LPL Research)

Summit Bank with branches in Eugene and Bend reported a rise in first-quarter profits compared to last year.  They posted a profit of $762,000, up 31% from last year. Non-interest income in the quarter more than doubled in the last 12 months.  The bank reached a record cash and securities portfolio of $49.2 million in the quarter, with capital growing 40% compared to 2016. (Summit Bank PR)

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



The stock market rallied yesterday, with the Nasdaq posting a record finish as investors welcomed a deluge of stronger-than-expected corporate earnings reports and economic data.  Comments from Treasury Secretary Steven Mnuchin that President Donald Trump’s tax reform is not linked to the outcome of the healthcare bill also bolstered sentiment.

Initial jobless claims rose by 10,000 to a still-low 244,000 in mid-April. Meanwhile, the number of out-of-work people collecting unemployment checks fell to a 17-year low last week, underscoring the strongest U.S. labor market in years.
The US manufacturing index slid in April, but from high levels, suggesting slower growth in the factory sector after a postelection surge.  The index fell to 22.0 from 32.8. It had hit a 33-year high of 43.3 in February and has receded every month since then.

The gap between an index of leading economic indicators and one of current economic indicators is at its highest since the eve of the recession — suggesting either a sharp upward turn in the economy is imminent, or a sharp downturn is imminent.

Shares of Dow component American Express gained more than 6% following a first-quarter earnings beat. The credit card company reported earnings of $1.34 a share on revenue of $7.9 billion.  Analysts had anticipated $1.28 a share in earnings. Excluding its Costco-related revenue decline, sales came in 7% higher than a year earlier.

With Northwest Quadrant Wealth Management I’m Tyler Simones
 



Mortgage applications decreased last week by 1.8% from the previous week. Total volume is down 23.5% from last year. The average interest rate for 30-year fixed-rate mortgage dropped to 4.22%. Mortgage rates dropped to their lowest level since November 2016. Applications to purchase a home fell 3% for the week and are up 1% from a year ago. Refinance applications were flat for the week, but are down 41.5% from last year. (Mortgage Bankers Association)

Industrial production rose 0.5% March. Most of that gain was due to the largest increase in utilities output on record. Factory output fell in March by 0.4%. (Reuters)

Consumer inflation in Europe moderated to 1.5% on an annualized basis, and to 0.7% when excluding the volatile food and energy categories. (LPL Research)

Rail giant, CSX, first-quarter profits climbed 2% to $362 million, or 39 cents per share.. CSX said its sales climbed 10% to $2.87 billion. The railroad was hit with a $173 million restructuring charge in the quarter. CSX layed off 1,000 management employees in February. CSX operates more than 21,000 miles of track in 23 Eastern states and two Canadian provinces. Its shares are up 31% in 2017.

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



Homebuilding fell in March by 6.8% to an annual rate of 1.22 million units. Single-family homebuilding fell 6.2.  Multi-family housing starts dropped 7.9%. On a positive note building permits increased 3.6% with a 13.8% surge in multi-family units. (Commerce Department)

Confidence among homebuilders remains high, according to the National Association of Homebuilder's Housing Market Index for April. While homebuilding is only a small part of the economy, it can provide important feedback on consumer strength. The overall housing picture continues to remain positive, supported by a strong labor market and tight inventory, although higher interest rates may be creating a bit of a headwind. (LPL Research)

Inflation expectations are at year-to-date lows. The 10-year breakeven inflation rate finished the week lower from 1.94% to 1.92% according to Federal Reserve Economic Data.

Big Blue, IBM, reported quarterly earnings that showed a growing cloud business. But the company has now posted five straight years of declining year-over-year quarterly revenues. The company had EPS of $2.38, that's a 1% gain.  IBM had sales of $18.2 billion, a 3% decline. IBM said it returned $2.6 billion to shareholders through dividends and share repurchases in the first quarter. (Reuters)

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



Horizon Air and its pilots’ union have reached a labor agreement that will raise wages.  Alaska Air Group, Horizon's parent company and APA Teamsters Local 1224 announced the agreement on Friday.  The union represents 675 pilots. (Oregon Live)

Upside surprise to Chinese GDP. Chinese Q1 GDP was up 6.9%. Consumer spending is key to the Chinese government, as it is trying to manage its economy away from infrastructure and heavy industry and toward consumer spending and the service sector. (LPL Research)

Goldman Sachs reported first-quarter earnings that disappointed the street and are sending the stock lower. The bank had EPS of $5.15 a share on revenue of $8.0 billion.  Profits from stock trading fell 6% from last year. (CNBC)

Bank of America first-quarter results put a smile on Wall Street faces.  The bank posted EPS of 41 cents on revenue of $22.2 billion. The bank saw loans business grow by 6% in the quarter. (Reuters)

Johnson & Johnson quarterly sales rose to $17.8 billion up 1.7% in the first quarter. Pharmaceutical sales rose 0.8% to $8.25 billion. The company had profits of $4.42 billion in the quarter. (Reuters)

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



Producer prices fell in March by 0.1%.  That is the first decline in seven months. The decline was led by the cost of services and energy products. Despite the monthly dip in prices, the PPI climbed 2.3% over the last year. That was the biggest gain since March 2012.  (AP)

 

Retail sales fell in March by 0.2%.  Year-over-year retail sales increased 5.2%. The slowdown in sales is blamed on slow tax refunds. (Reuters)

 

The Consumer Price Index dropped 0.3% in March, the first decline in 13 months and biggest decrease since January 2015.  Year-over-year CPI is up 2.4%. (Labor Department)

 

Mixed batch of bank earnings last week. Results from the three big banks were varied but positive signs included strong trading results, particularly in fixed income, and solid loan underwriting. Net interest margin and loan growth performance were mixed for the group (though JPMorgan produced year-over-year loan growth of 9% and an increase in net interest margins). We expect loan growth to pick up over the course of the year for the banks overall as policy uncertainty clears and recent strong consumer confidence data is followed by better economic data. (LPL Research)

The S&P 500 is up 1 and the NASDAQ is up 15.  The MSCI international index is down.



Total mortgage applications were up 1.5% for the week, but is 21% lower than a year ago. Interest rates fell for the third straight week. Applications to refinance were unchanged for the week and are 40% lower than a year ago. Applications to purchase a home rose 5% for the week and are 3% higher than a year ago. (Mortgage Bankers Association)

Import prices fell 0.2% last month, their biggest drop in seven months, as the cost of petroleum declined. Prices for imported petroleum fell 3.6% in March. The year-on-year increase in import prices is 4.2 percent. Excluding petroleum, import prices have now increased for three straight months. Export prices rose 0.2% in March. Export prices increased 3.6% from a year ago, the biggest rise since December 2011. (Labor Department)

Private oil inventory data showed a 1.3 million barrel drawdown this week. The inventory data, supply disruptions, an in geopolitical tensions, and reports that the Saudis will agree to extend production curbs have fueled oil's recent winning streak. (LPL Research)

The latest Job Openings and Labor Turnover Survey revealed a 2.1% increase in job openings in February to 5.7 million, the highest level since July 2016.  Hires fell 2% month over month but remained near the best levels of the expansion. Year over year, openings were up 3.2% and hires were up 2.4%. (Labor Department)

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



The remarkable surge in small business optimism that began in November was sustained in March, according to the National Federation of Independent Business (NFIB) Small Business Economic Trends Report. The Optimism Index in March was 104.7. On the other hand, the Uncertainty Index hit 93 in March, which is the second highest reading in the survey’s history, as more small business owners are having a difficult time anticipating the factors that affect their businesses, especially government policy.

Inflation expectations are slightly lower. The 10-year breakeven inflation rate this week is slightly lower from 1.97% to 1.94% according to Federal Reserve Economic Data. The 1.94% level is below the Fed's 2% inflation target. (LPL Research)

We are out of the gates with earnings season.  Delta Air Lines had first-quarter profits of $603 million. The airline had sales of $9.2 billion in the period. Delta shares are down almost 8% since the beginning of the year. (AP)

Starting next week, Wal-Mart will give discounts on 10,000 online-only items if you pick them up at the store. The retail giant is also cutting hundreds of jobs to reduce costs. (CNBC)

Gold is at its highest level since November, up 10% this year, on the flight to safety against international uncertainty. (CNBC)

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



New York Stock Exchange (NYSE) margin debt made another all-time high in February at $528 billion. Many say this is a contrarian indicator, as it shows investors are potentially over-leveraged. So is record margin debt really a warning sign for equities? For starters, it appears to be more of a coincident indicator than a leading indicator, as margin debt made an all-time high in April 2013 and it has moved higher with the S&P 500 the past four years. In fact, the S&P 500 has gained approximately 70% since margin debt started making new highs. (LPL Research)

The S&P 500 is likely to produce double-digit year-over-year earnings growth for the first quarter as earnings season gets underway this week. Consensus is for +10.1% earnings growth.  That would be the best since 2011. Growth is expected to be powered by energy's rebound from the oil downturn that battered the sector early last year while solid macro data in recent months is also supportive. (LPL Research)

The New York Stock Exchange (NYSE) Composite Advance/Decline (A/D) line broke out to new highs last week. This shows how many stocks are advancing versus declining at any given time. In other words, it measures overall market breadth. To see new highs occur suggests there is a good deal of investor participation and the overall equity rally could continue to have legs. (LPL Research)

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



Mentor Graphics' $4.5 billion sale, which closed last week, won't bring immediate changes to the company or its Wilsonville headquarters, says the new owner Siemens. Mentor will retain its name, headquarters and CEO. Siemens the German engineering giant also said Mentor will hold onto the vast majority of its employees. Mentor reported record revenue of $1.3 billion in 2016 and $155 million in profits. Mentor employed 5,700 before the deal with Siemens, including about 1,000 at its 53-acre Wilsonville campus. (PBJ)

A little deeper looks at the March jobs report. The U.S. economy created 98,000 jobs in March, decelerating from February's downwardly revised 219,000. The unemployment rate was a positive surprise, falling from 4.7% to 4.5%. Wage growth disappointed slightly at +0.2% month-over-month growth, but stands at a healthy 2.7% year over year. Slowing job growth is normal at this point in the cycle. Job creation would need to slow to a sustained 25,000-50,000 per month to signal that a recession may be imminent. (LPL Research)

The banking scandal at Wells Fargo is still unfolding. An independent Wells Fargo investigation into that sales scandal, is clawing back an additional $28 million in pay from former CEO John Stumpf and $47 million from community banking chief Carrie Tolstedt. (CNBC)

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



The US economy added 98,000 new jobs in March. Of those 89,000 were in the private sector.  The unemployment rate fell to 4.5%. (Labor Department)

Costco had higher comparable same store sales last month of 6%, following an increase of 4% in February and 7% in January. The company had sales of $11.64 billion in March, up 9% year over year. Costco, has 729 warehouse stores, 508 in the U.S. and Puerto Rico, 95 in Canada, 37 in Mexico and 79 in the rest of the world. (Zacks)

 

The Federal Reserve minutes from the March meeting show they were beginning to discuss the gradual reduction of the Fed's $4.5 trillion balance sheet.  No final decision was made. They also expressed concern about stock valuations. (LPL Research)

Initial jobless claims for the week showed a continued decline in those seeking unemployment benefits. The decrease in claims to 234,000 points toward a tightening labor market. This marks the 109th straight week the figure has come in below 300,000, a key threshold generally associated with a healthy labor market. (LPL Research)

Join us this weekend for Financial Focus Radio Show when will answer the question “What should I do if the stock market falls?”

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



Walgreens reported quarterly results as EPS to rose 4% to $1.36, on revenue of $29.5 billion. Same-store sales at U.S. retail pharmacies rose 2.4%. Prescriptions filled at comparable stores climbed 7.9%, and market share widened to 20.4% from 19.4% a year ago. (Investor Daily)

 

ADP employment report points to another strong month of job growth. ADP, the nation's largest payroll processing firm, says the economy added 263,000 new jobs in March. While the report augurs well for Friday's government employment report. Areas of strength indicated in the report included construction, manufacturing, and small business hiring, a positive sign that a recent surge in business confidence may be flowing through to hiring decisions. Estimates for Friday's jobs report stand at non-farm payroll growth of 178,000 and the unemployment rate holding steady at 4.7%. (LPL Research)

 

The non-manufacturing sector grew in March for the 87th consecutive month, says the Institute of Supply Management. The index hit 55.2.  Fifteen non-manufacturing industries surveyed reported growth and three industries reporting contraction in March.

 

Bed Bath & Beyond reported a quarterly profit of $268.7 million. The home goods retailer posted revenue of $3.53 billion.  Bed Bath & Beyond shares have fallen 7% since the beginning of the year. (FBN)

 

The S&P 500 is flat and the NASDAQ is up 2.  The MSCI international index is flat.

 

Oil is up 20 cents at $51.33 a barrel.

 

Gold is up $5 at $1254 a Troy ounce.

 

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



The Institute for Supply Management's (ISM) manufacturing Purchasing Managers' Index (PMI) for March posted a strong 57.2. Internal numbers were robust, with the employment component rising to the highest level since June 201. There were, solid new orders, and a meaningful rise in new export orders. Improving global growth, a stabilizing dollar, and a rebound in oil prices have all been contributing to the rebound in manufacturing, which may be part of a developing trend of accelerating business spending in 2017. (LPL Research)

February's trade deficit came in at $-43.2 billion, a sizable improvement on January's disappointing $-48.2 billion. The data should provide a boost to first quarter 2017 gross domestic product (GDP), to be released later this month. The improved data were largely driven by a decline in imports (-1.8%), but did show a small gain in exports (0.2%), a positive sign for global growth, with the total value of exports rising to their highest level since 2012. (LPL Research)

LinkedIn Workforce Report says employers hired fewer people in March, but year-over-year hiring remained strong. Hiring the U.S. was 5.8% higher than March 2016.
Hiring in the oil and energy industry was up by 30.8% from March 2016. (AP)

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



The S&P 500 lost 0.04% in March. This was the first monthly decline since October, just missing the first five month win streak since March-July 2016. It was still a great first quarter as the S&P 500 jumped 5.5%; the best return since Q4 2015 and the best Q1 since 2013. For the quarter, technology and consumer discretionary led, while telecom and energy lagged. (LPL Research)

Over the past 20 years, no month sports a higher monthly S&P 500 average than April at 2.0%. Going back to 1950, the average monthly return is 1.5%, with only the historically strong months of November and December better. There are multiple potential market-moving events in April: the start of Q1 earnings season, elections in France, and a potential government shutdown. But for the long-term retail investor this will be nothing more than white noise. (LPL Research)

The manufacturing sector expanded in March for the 94th consecutive month. The index hit 57.2, a decrease from the February reading of 57.7. Of the 18 manufacturing industries included in the survey, 17 reported growth. (Institute for Supply Management)

February construction spending increased 0.8%. Its highest level since April 2006. (Commerce Department)

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



Consumer spending rose in February by 0.1%. Consumer spending accounts for more than two-thirds of U.S. economic activity. When adjusted for inflation, consumer spending fell 0.1% in February. (Commerce Department)
 
The personal consumption expenditures price index gained 0.1% in February.  Year-on-year rate of increase in the PCE price index which measures inflation is 2.1%. That is the biggest year-on-year gain since April 2012. (Commerce Department)
 
Personal income rose 0.4% last month. Accounting for inflation wages increased 0.2%. Savings rose to a five-month high of $808.0 billion. (Commerce Department)
 
On the international front. Chinese PMI data remains relatively strong at 51.8. While not a robust figure, it is still the strongest official data since early in 2012. The Eurozone Consumer Spending Rose in February

Consumer Price Index (CPI) reading was softer than expected as full year CPI came in at 1.5% vs. the 1.8% expected. The softness of the data may take some pressure off the European Central Bank to begin tightening monetary policy. (LPL Research)
 
Haribo, maker of golden gummy bears, announced plans to open their first US factory in Wisconsin in 2020 and employ 400 individuals. Haribo employs 7,000 people worldwide at 16 sites in 10 countries. (Yahoo)
 
The S&P 500 is up 1 and the NASDAQ is up 6.  The MSCI international index is flat.
 
Oil is up 12 cents at $50.72 a barrel.
 
Gold is down $2 at $1249 a Troy ounce.
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.
 
 


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