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Business News Archives for 2017-05


Consumer spending recorded its biggest increase, 0.4% in four months in April. Consumer spending accounts for more than two-thirds of U.S. economic activity. Consumer spending grew at its slowest pace in more than seven years in the first quarter. That helped to restrict gross domestic product growth to a 1.2% annual rate in the first quarter. (Commerce Department)

The personal consumption expenditures (PCE) price index moved up 0.2% in April. In the last 12 months, the PCE price index increased 1.7%. (Commerce Department)

Personal income rose 0.4% last month. Income at the disposal of households after accounting for inflation advanced 0.2%. Savings were little changed at $759 billion in April. (Commerce Department)

The Consumer Confidence Index fell again in May to 117.9, but U.S. consumers remain optimistic on the whole. The Consumer Confidence Index hit 125.6 in March, its highest level since December 2000. Individuals saying business conditions are "good" edged down from 30.8% to 29.4% in May, but those saying business conditions are "bad" was unchanged at 13.7%.  Persons claiming jobs are "hard to get" decreased from 19.4% to 18.2%. (Conference Board)

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



Durable goods orders fell 0.7% in April. The downturn was the first since durable goods orders fell 4.6% in November 2016. Orders for transportation equipment fell 1.2% pulled down by a 9.2% drop in orders for civilian aircraft. (Commerce Department)

Gross domestic product increased at a 1.2% annual rate in Q1. That was the weakest performance since the first quarter of 2016 and followed a 2.1 percent rate of expansion in the fourth quarter. There are signs GDP growth regained speed early in the second quarter. (Commerce Department)

The S&P 500 Index traded for the 100th day of 2017 last Thursday. For the year it is up 7.9% and has made 19 new all-time highs. That is the most all-time highs as of day 100 since 1999. What does a good start to the year mean? Since 1950, there were 23 other years the S&P 500 Index was up 7.5% or more as of day 100 and the rest of the year it was higher 20 of those times with an average return of 9.0% the rest of the year. The full year return those 23 years was 23.4%. (LPL Research)

Shareholders approved the merger of Bend-based Bank of the Cascades with First Interstate Bank of Billings, Montana. The merger will be completed today. (Bulletin)

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



Horizon Air pilots approved an amended contract that raises the carrier's pay scale. Seventy-nine percent of voting Horizon pilots approved ratification with an 88% participating. (OregonLive)

Sears reported a first-quarter loss and same-store sales continued to decline at a double-digit pace. The company sold its Craftsman brand to Stanley Black & Decker in March for $525 million. Sears ended the first quarter with $264 million in cash. Sears stock has fallen more than 19% year-to-date and is down about 40% over the past 12 months. (Reuters)

Best Buy had strong sales of mobile devices and gaming products during the first quarter. Best Buy sales climbed to $8.53 billion. Online sales jumped 22.5% domestically. The company had profits of $188 million, or 60 cents per share. (AP)

Costco shares are on fire posting a quarterly profit of $700 million, or $1.59 per share. Total sales rose 7.8% to $28.86 billion. Sales and how much members pay in annual fees both rose. Total same store sales rose 5%. U.S. same stores sales rose 6%. Of Costco's 732 stores, 510 are in the U.S. Costco shares are up 9% since the beginning of the year. (AP)

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



The Port of Portland has selected Curtis Robinhold as the Port's new executive director. Robinhold, is currently deputy to current executive director Bill Wyatt and is his hand-picked successor. He has been the Port's deputy director since 2013. (PBJ)

Corona beer maker Constellation Brands is looking to buy Jack Daniels producer Brown-Forman. Brown-Forman has indicated it's not interested in selling. (CNBC)

Total mortgage application volume increased 4.4% last week. Refinance volume was higher by 11% for the week, but remains 30% below the same week one year ago. Interest rates for 30-year fixed-rate mortgages decreased to 4.17%.  (Mortgage Bankers Association)

Home resales fell 2.3% in April more than expected.  Mostly due to a shortage of houses on the market that is keeping prices elevated and sidelining prospective buyers. (National Association of Realtors)

Moody's downgraded Chinese sovereign debt citing concerns about excessive leverage. The downgrade isn't really "news," it's more a confirmation of what we already know.  (LPL Research)

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



Advanced Manufacturing reports that “manufacturing economic growth should continue through the rest of 2017.” The semi-annual forecast predicted “an average revenue increase for the year of 4.4%, compared with 2016.” “The survey showed manufacturers this year expect a 5.2% increase in capital expenditures, a 1.3% rise in employment and a 4.4% rise in revenues.”

New single-family home sales tumbled 11.4% in April from a 9-1/2-year high in March. However new home sales increased 0.5% on a year-on-year basis. April's sales drop came after three straight months of increases. (Commerce Department)

Flir Systems the Wilsonville thermal imaging company has a new CEO.  He is Jim Cannon, an Army veteran who has been at toolmaker Stanley Black & Decker for the past 16 years. Flir is one of Oregon's largest companies, reporting sales of $1.7 billion last year and profits of $167 million. It employs nearly 3,500 worldwide. (Oregon Live)

Home improvement supplier Lowe's profit fell 32% to $602 million, or 70 cents per share last quarter. Sales rose 10.7% to $16.86 billion. Same-store sales rose only 2%. (AP)  

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



It is the unofficial last week of an excellent earnings season. With just 28 S&P 500 companies left to report results, S&P 500 earnings growth for the first quarter is tracking to a very strong +15.2% year-over-year increase, +11.1% excluding energy. Technology jumped ahead of financials and materials last week into second place in the earnings growth rankings (energy is first). (LPL Research)

Amazon is offering live television channels on its platform in Europe as it steps up its push into broadcasting and challenges traditional networks. Today, Amazon holds its annual shareholder meeting in Seattle. (Financial Times)

SolarWorld Americas has filed a layoff notice for its Hillsboro solar panel factory. The German parent company is now insolvent. All the current 800 workers could lose their jobs. The Worker Adjustment and Retraining Notification Act requires companies with 100 or more employees to notify affected workers 60 days prior to closures and layoffs. (PBJ)

AutoZone reported quarterly profits rose to $331.7 million, or $11.44 a share from a year ago. Domestic same-store sales declined 0.8%. The stock has tumbled 16.5% year to date. (AP)

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



This week’s economic calendar includes data on purchasing manager surveys, housing, trade, durable goods, and revised first quarter gross domestic product.  The Fed will remain in focus with minutes from the May 3rd meeting due out Wednesday. We believe the market is correctly pricing in a June 14 rate hike. Overseas include first quarter German and U.K. GDP, German business confidence, and Eurozone purchasing manager surveys. (LPL Research)

Ford will replace CEO Mark Fields. The automaker's new CEO will be Jim Hackett, former CEO of Steelcase and currently chairman of the autonomous vehicles unit at Ford. This comes as profits margins at Ford trail those of other car makers and as the stock price has fallen almost 40% since Field took over three years ago. (CNBC)

U.S.-based chemical company Huntsman and Switzerland's Clariant are combining in a more than $14 billion merger of specialty chemical companies. The all-stock transaction will create a company that will be 52% owned by Clariant shareholders. (CNBC)

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



Finally, some volatility. After 15 consecutive days without a S&P 500 closing up or down 0.5% (the longest streak since 1969), volatility came back in a big way with an 1.8% drop on Wednesday. This was only the second 1% drop this year and it was the worst one-day drop since September. (LPL Research)
In the radio world - Pandora is in active talks with SiriusXM about being bought by the satellite radio company. (New York Post)

About-face! IBM a pioneer of remote work, is giving thousands of its work-from-home employees in the U.S. a choice this week: Abandon your off-site workspaces and relocate to a regional office, or leave the company. (WSJ)

Big green, big boy toy maker, Deere saw earnings per share to rise 7.7% to $1.68, with revenue growing 3% to $7.32 billion. Agriculture and turf sales grew 1%, construction and forestry sales climbed 7%. Deere profits and revenues have been in a slump since 2014, which the company has attributed to a weak global agricultural economy. Deere says it is starting to see signs of a rebound in some markets hard hit by low crop prices. (Reuters)

Join us this weekend for Financial Focus Radio when we will talk about –“Has the Trump rally ended?”

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



Oh how the world is changing. McDonald's is expanding delivery via UberEats to about 1000 restaurants nationwide, a move aimed at winning back younger consumers willing to pay more for food brought to their doors. McDelivery, is now available at about 300 restaurants in Los Angeles, 144 in Phoenix and 59 in Columbus, Ohio and 300 in Chicago. Nearly 75 percent of the U.S. population lives within three 3 miles of a McDonald's.  (Chicago Tribune)

Red Robin Gourmet Burgers reported better-than-expected first-quarter earnings and sales. Red Robin had a profit of $11.6 million, or 89 cents a share, in the quarter, compared with $14.2 million, or $1.03 a share, a year ago. Sales were $418.6 million, up 4% from $402.1 million a year ago. Same store sales fell 1.2%. (Market Watch)

Jack In The Box reported quarterly profits of $33.1 million or $1.06 per share. The results surpassed Wall Street expectations. The burger chain had sales of $369.4 million.  Jack In The Box shares have dropped nearly 9% since the beginning of the year.

Wal-Mart grew its e-commerce sales a whopping 63% last quarter. The majority of these sales were organic through Walmart.com. (CNBC)

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



Want a simple example of what we mean by the current lack of market volatility?  Last year at this point the S&P 500 index had closed down 1% or more 17 times.  Only once so far, this year. (S&P)

Construction of new homes fell by 2.6% in April to an annual rate of 1.17 million units.  That is a second straight month of declines and pushes activity to the lowest level in five months. The weakness was led by a big drop in construction of apartments. (Commerce Department)

Home Depot reported earnings per share of $1.67 on revenue of $23.89 billion. Same-store sales grew by 5.5%.  Home Depot stock has climbed more than 18% over the past 12 months. (CNBC)

Industrial production in April grew 1%, the fastest pace in more than three years as manufacturers and mines/oil recovered from a March downturn. Factory production rose 1%. Mine/oil production increased 1.2%. Utility output rose 0.7%. Factory production has risen three of four months this year. Manufacturing has recovered from a rough patch in late 2015 and early 2016 caused by cutbacks in the energy industry and a strong dollar, which makes U.S. goods costlier in foreign markets. (Federal Reserve)

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



Oregon’s largest employer, Intel, has named Gregory Bryant to lead its PC division. He currently leads the company's connected home and commercial business. (PBJ)

Chinese industrial production growth came in at 6.5% weaker than expected.  On an absolute basis, the economy is still on track to meet its growth goals, though it looks like growth may have peaked for the year. The government continues to crack down on excess leverage in the financial system; these numbers are unlikely to move them off that path. (LPL Research)

The S&P 500 snapped its 3-week win streak last week, with a modest 0.3% drop. Continuing was the incredibly small daily ranges and lack of overall volatility. On the week, the S&P 500 traded in less than a one-percent range (from high to low) for the second consecutive week (only the third time since 1995). Additionally, the intraday range on Friday was 0.22% - the smallest daily range on a full day of trading in nearly three years. (LPL Research)

Ford, the only domestic automaker not too be bailed out with your tax dollars, is cutting 10% of its global workforce or 20,000 jobs. Most of the jobs will be salaried workers who do not have union protection. (CNN)

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

 



Through Friday we have seen the following move in world stock markets for 2017 (NASDAQ).

Mexico - +19%
Emerging Markets - +18%
France - +17%
Europe - +10%
Nasdaq 100 - +17%
S&P 500 - +7%
Russell 2000 - +2%

Consumer prices rose 0.2% in April after dropping in March. Energy prices rose 1.1%. Over the past 12 months, inflation is up 2.2%. (Labor Department)

The University of Michigan's Consumer Sentiment Index finished April with a reading of 97, up from 89 for the same month a year ago. (CNBC)

Retail sales rose 0.4% in April, missing consensus expectations of 0.6% growth. The pattern appears to be increasing spending on experiences, such as dining and entertainment, rather than goods. More spending is moving to online. (LPL Research)

Apple has issued $7 billion in corporate bonds, according to the Securities and Exchange Commission. Apple has been using debt to pay shareholders while holding most of its $256 billion in cash overseas to avoid repatriation taxes. Since Apple launched its shareholder-return program in 2012, its long-term debt has risen from zero to nearly $85 billion.

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



Inflation at the wholesale level jumped in April by 0.5% the largest increase in three months, fueled by rising food and energy prices. Energy prices rose 0.8% in April, while food costs were up 0.9%. Wholesale inflation is up 2.5% over the past 12 months, the largest 12-month gain in five years. (Labor Department)

Nordstrom saw profits jump 37% to $63 million, or 37 cents per share at its department stores in the first quarter. But same store sales declined 0.8% in the quarter. Sales results at Nordstrom Rack were up 2.3%.  Nordstrom total revenue grew 3% to $3.35 billion. (AP)

It has not been pretty to watch, the slow death of a once great icon. J.C. Penney's net loss widened to $180 million, or 58 cents per share, in the first quarter, from $68 million, or 22 cents per share a year ago. This was due to weaker sales at brick-and-mortar locations.  Earlier this year Penney's announced it would close 138 stores representing 13% of all their stores but generated less than 5% of annual sales. Shares of Penney's have fallen over 33% over the past year. (AP)

Join us this weekend for the Financial Focus Radio Show when we will talk about the dangers in the stock and bond markets.

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





 



Import prices increased in April by 0.5%.  Over the last 12 months import prices rose 4.1%. Prices for imported petroleum climbed 1.6%.  Export prices increased 0.2% in April. Export prices rose 3.0% year-on-year. Prices for agricultural exports advanced 0.3% as a 37.9% jump in vegetable prices offset falling prices for soybeans, corn and wheat. (Labor Department)

Chinese producer prices rose 6.4% year over year.  Consumer prices remained contained, rising 1.2% year over year. Inflation in China is moderating as less producer inflation is translating into consumer price increases. (LPL Research)

Kohl’s had a first quarter profit of 39 cents per share beating expectations. This came on sales of $3.84 billion.
Kohl's shares have declined 18% since the beginning of the year. (AP)

Whole Foods reported quarterly earnings of $99 million. That produced a profit of 31 cents per share. The results met Wall Street expectations. The grocer had sales of $3.74 billion in the period. Whole Foods shares are up 18% in 2017. (AP)

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



An Oregon business legend has passed. Benjamin Whiteley was 87. He died on May 4th.  He was the former CEO of The Standard insurance company and chairman of Greenbrier Companies.  He also served on the boards of Northwest Natural Gas and Willamette Industries. (PBJ)

The Volatility Index, also known as the VIX (VIX) closed at 9.77 Monday for the lowest close on the "fear gauge" since December 1993. Going back to 1990, this is only the 10th close beneath 10 and the first since January 2007. (LPL Research)

Total mortgage application volume increased 2.4% last week. Volume is still nearly 14% below a year-ago. Mortgage applications to purchase a home gained 2% for the week and are 6% higher than a year ago. Mortgage applications to refinance a home loan rose 3% for the week but are 32% below last year. The average interest rate for 30-year fixed rate mortgage remained unchanged at 4.23%. (Mortgage Bankers Association)

Proctor & Gamble's Gillette revamped its subscription-based shaving razor service to include a text-to-order feature, the latest move in its battle with Unilever's Dollar Shave Club. (CNBC)

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



The NFIB Index of Small Business Optimism posted another historically high reading in April, but expectations for future business conditions plunged by eight points, a sign that business owners were shaken by Congress’ failure at the end of March to repeal and replace Obamacare. The Index dipped 0.2 points April, settling at 104.5. April was the sixth straight month for historically high optimism, a hot streak not seen since 1983.

Strong earnings season got even better last week. S&P 500 earnings for the first quarter rose more than 1% over the past week and are now tracking to a 14.7% year-over-year increase, compared with the 10.2% increase in estimates. Both the earnings growth and beat rates (75%) are the best in more than five years. Excluding the rebounding energy sector, earnings are still on pace to grow a solid 10.5% year over year. About 40 S&P 500 companies will report results this week as earnings season winds down. (LPL Research)

Up three weeks in a row. On Friday, the S&P 500 closed at its first all-time high since March 1 and in the process rose for the third consecutive week. It was also the first green Friday for the S&P 500 in nearly two months. This was the second three-week win streak of the year, with the earlier streak making it all the way to six weeks in a row. There hasn't been a year with two separate six-week win streaks since 2013. (LPL Research)

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



We have had a little time to dig into Fridays big jobs report where the U.S. economy created 211,000 jobs in April, rebounding sharply from a downwardly revised 79,000 in March. The unemployment rate ticked down to 4.4% versus expectations of an increase to 4.6%, helped by a decline in the participation rate. Wage growth climbed 0.3%, in line with expectations, and stands at 2.5% year over year, signaling that wage pressures remain contained despite an improving labor market. The overall jobs picture likely keeps the Fed on track for two more rate hikes in 2017. (LPL Research)

 

The past eight days are about as slow as it gets. The S&P 500 has incredibly closed up or down less than 20 basis points seven of the past eight days, tying the all-time record from 1972. Additionally, it has closed less than 0.5% away from new all-time highs each of those days, but hasn't been able to make new highs. In fact, the S&P 500 hasn't made a new high since March 1st. (LPL Research)

 

Coach is buying the clothing and accessories maker Kate Spade for $18.50 per share or $2.4 billion in cash. Coach said it would save $50 million in operational costs within three years. (CNBC)

 

The S&P 500 is flat and the NASDAQ is up 3.  The MSCI international index is flat.

Oil is down 10 cents at $46.11 a barrel.

Gold is up $6 at $1233 a Troy ounce.



The Labor Department says the US economy added 211,000 new jobs in April. Of those 191,000 were in the private sector and 20,000 in government. The unemployment fell to 4.4%, lowest since May of 2007.

Worker productivity fell 0.6% in the first quarter from the fourth quarter of 2016, leading to a jump in labor-related costs. This was the weakest in a year.  Year-over-year productivity increased at a 1.1% rate. Productivity has increased at a meager average annual rate of 0.6% over the last five years, well below its long-term rate of 2.1% from 1947 to 2016. Per unit labor costs increased at a 3.0% rate in the first quarter. (Labor Department)

The US trade balance was near flat at $-43.7 billion in March. Both imports and exports fell, signaling a decline in trade activity. Services trade activity was strong, exhibiting the continued value of good old American know-how as a national resource. (LPL Research)

Fast food purveyor YUM Brands released same-store Q1 sales at their restaurants yesterday according to a news release:
Pizza Hut: down 3%
KFC: up 2%
Taco Bell: up 8%

Join us this weekend for Financial Focus Radio when we will talk about the danger of bonds.

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



The Institute of Supply Management non-manufacturing index posted 57.5 for the month of April, growing for the 88th consecutive month. A reading above 50 on this index indicates expansion in the service sector. The ISM's Prices Index increased 4.1% in April, as prices in the service sector grew for the 13th consecutive month and at a faster rate. (Bloomberg)

First quarter Gross Domestic Product (GDP) for the Eurozone grew 0.5% as expected. Europe has struggled to grow its economy over the past few years, but this data, suggests full year growth could top economists’ expectations for 1.7% this year. (LPL Research)

Church & Dwight, makers of  Arm & Hammer Baking Soda and Oxi Clean announced first quarter EPS of $0.51 per share, an 18.6% increase. Sales grew 2.3%. (Business Wire

Companies announced 36,602 layoffs in April, a 15% decrease from March. Aprils job cuts were 43% lower than the 64,141 recorded in April 2016. Employers have announced a total of 162,803 planned job cuts through the first four months of 2017, down 35% from a year ago. Retail had the most job losses in April with 11,669 job cuts. (Challenger, Gray & Christmas)

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

 



Another busy week of earnings on tap. A very strong earnings season continues this week with 127 S&P 500 companies reporting. With about two-thirds of companies having reported, S&P 500 earnings for the first quarter of 2017 are now tracking for a 13.6% year-over-year increase, well above the 10.2% increase expected. The 77% earnings beat rate thus far, should it hold, would be the best since 2010. (LPL Research)

U.S. factory activity slowed in April . The Institute for Supply Management (ISM) index of national factory activity dropped to a 54.8 last month, the weakest reading since December. A reading above 50 indicates an expansion.  Manufacturing accounts for about 12% of the U.S. economy. (Reuters)

Mondelez International, the maker of Oreo cookies, Cadbury chocolate and Trident gum, reported first-quarter profits of $630 million, or 41 cents per share. The company had sales of $6.41 billion in the period.
Mondelez shares are down more than 1% since the beginning of the year. (AP)

The ADP jobs report says the economy added 177,000 private sector positions in April.

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



The old Wall Street cliché goes "sell in May and go away".  Should you worry? In fact, the Dow, S&P 500, and Nasdaq have not fallen in May since 2012. (CNBC)

Consumer spending was unchanged in March showing weak domestic demand in the first quarter. Adjusted for inflation, consumer spending increased 0.3%.  Spending has been constrained by the mild winter, which undercut demand for heating and utilities production. Delays in income tax refunds also weighed on consumer spending. Consumer spending accounts for more than two-thirds of U.S. economic activity. (Commerce Department)

Personal income gained 0.2%. Income at the disposal of households after accounting for inflation increased 0.5%, the biggest gain since December 2015. Savings increased to $849 billion from $819 billion in February. (Reuters)

Wages and benefits accelerate. The Labor Department's Employment Cost Index, which includes both wages and benefits, rose 0.8% in the first quarter of 2017, ahead of expectations and the best quarterly rate of growth since before the Great Recession. Stronger wage growth points to a tightening labor market, although spare capacity and a low participation rate will likely keep any possibility for outsized wage acceleration in check. (LPL Research)

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



Portland based Columbia Sportswear posted a record first quarter with sales up 4% over last year. Sales totaled $543.8 million producing a record profit of $36 million. CEO Tim Boyle cited strength in Europe as well as the SOREL brand's spring launch for Columbia's solid start to the year. (PBJ)

Oregon’s largest employer, Intel, had first quarter revenue of $14.8 billion. Profits for the first quarter were up 45% over last year, to $3 billion, or 61 cents per share. The Data Center Group, the focus for the company’s future growth, had revenue of $4.2 billion, up 6% year-over-year. The company approved another $10 billion for the share buyback program that now totals $15 billion. In the first quarter, the company repurchased $1.2 billion, or 35 million shares, of its stock. Here in Oregon, the company employs 19,300 people. (PBJ)

Consumer sentiment continued higher in April according to the University of Michigan. The Consumer Sentiment Index hit 97. "Although the partisan divide has slightly narrowed in recent months, it still reflects a very pessimistic economic outlook among Democrats and a very optimistic outlook among Republicans," the report commented.

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


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