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Business News Archives for 2017-06


Gross domestic product increased at a 1.4% annual rate in the first quarter, the slowest growth rate since the second quarter of last year. Exports gained by 7.0%.  Business spending on equipment increased by 7.8%. (Commerce Department)

The merger agreement between Walgreens and Rite Aid has been called off. Instead, Walgreens will now buy about 2,000 Rite Aid stores for about $5.2 billion. Rite Aid, had nearly 4,600 stores in the U.S. as of May. Stores included in the Walgreens deal are primarily located in the Northeast, mid-Atlantic and Southeast. (Reuters)

Nike reported quarterly results and the stocks is up 7% on the news. Nike is entering a pilot with Amazon, where they will directly sell a limited product assortment on Amazon. The offerings will include athletic footwear, apparel and accessories. Oregon’s only Fortune 500 company earnings per share was 60 cents on revenue of $8.68 billion. Total sales climbed 5.3%.  Sales for the Converse brand was $554 million, up 10%.  
(CNBC)

Join us this weekend for Financial Focus radio for “the truth in wealth building” with Troy and Tyler.

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



U.S. stocks traded close to the flat line yesterday, with afternoon gains driven by a rally in the health-care and biotechnology sectors.  Health-care stocks led the gains, up 1.4%, as lawmakers released a “discussion draft” of the health-care bill that is aimed at repealing and replacing Obamacare. The plan includes cutting Medicaid and eliminating penalties for people who don’t buy insurance among other changes.

Oil finished modestly higher yesterday, with a second weekly decline in U.S. crude supplies helping prices recoup some of their recent losses.  But prices were still stuck in a bear market, defined as a decline from a recent peak of at least 20%, on lingering worries about strong domestic production growth.

Shares of Oracle are up over 8% after reporting earnings that topped Wall Street expectations after the bell yesterday.  Better-than-expected results were driven by its cloud business; revenue in that segment soared 58% to $1.4 billion.

American Airlines is in focus after receiving an unsolicited notice from Qatar Airways indicating that it wants to make a “significant” investment in the US airline, amounting to about a 10% stake.  Shares of American Airlines are higher on the news.

And Staples shares are moving higher following a Reuters report that private equity firm Sycamore Partners is in advanced talks to buy the office-supply retailer.  The deal could be worth more than $6 billion.


 



U.S. existing home sales rose in May by 1.1% to its third highest level in a decade. A chronic inventory shortage pushed the median home price to an all-time high. The number of homes on the market was down 8.4% from a year ago. Housing inventory has dropped for 24 straight months on a year-on-year basis. The median house price increased to an all-time high of $252,800, a 5.8% jump from one year ago.  At the current sales rate, it would take 4.2 months to clear inventory. The median number of days homes on the market in May was 27. (National Association of Realtors)

Total mortgage application volume is nearly 14% lower compared to one year ago. Refinance volume is about 30% lower than a year ago. Mortgage applications to purchase a home are 9% higher than one year ago. (Mortgage Bankers Association)

Private equity firm Sycamore Partners looking to acquire Staples.  The deal could top $6 billion. Staples has 1,255 stores in the United States and 304 in Canada. It has the largest market share of office supply stores in the United States at 48% percent, and its share has increased since 2011. (Reuters)

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



CNBC reports that most small businesses still rely on word-of-mouth advertising, and 45% said they do not have a website. Only 36% of the small businesses surveyed use a business website to communicate news to customers and potential customers.


The publication Advanced Manufacturing reports April U.S. cutting tool consumption totaled $168 million, with a year-to-date total of $716 million, up 3.5% compared to 2016.


The market continues to expect slower trajectory of interest rate hikes. The Fed's post-FOMC statement leaned hawkish in that they continued to have an upbeat view of the economy, and didn't scale back on rate hike projections. However, despite this hawkish bent, market expectations for rate hikes fell slightly. Markets are currently pricing in a 46% chance of a rate hike by the end of 2017. (LPL Research)


FedEx quarterly earnings were $4.25 per share on sales of $15.7 billion. Both better than expected. The stock has been on a tear, gaining more than 12% in 2017. (Thomson Reuters)

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



Vancouver-based Papa Murphy's Pizza has hired former Dunkin' Brands executive Weldon Spangler as its new CEO. He brings 30 years of experience with companies like Starbucks and YUM, serving most recently as senior vice president for Canton, Mass.-based Dunkin' Brands Group, where he oversaw the Baskin Robbins ice cream brand in the U.S., Canada and Puerto Rico. (PBJ)

Uber is losing U.S. market share, dropping from 84% at the start of 2017 to 77% at the end of May. Meanwhile, smaller ride-hailing rival Lyft is gaining ground. (FT)

Hasbro's is making a big bet on board games. The toy company is launching a subscription service that will send a new board game to consumers every three months. It costs $49.99/quarter. Sales of children's games rose 27%     this year; family strategy games, such as Uno, are up 56% in 2017. Hasbro stock is up more than 43% this year. (CNBC)

Charitable giving in the U.S. topped $390 billion in 2016, up nearly 3% according to the Giving USA Foundation.

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



Bend-based Humm Kombucha has received its first institutional investment of $10 million from San Francisco-based VMG Partners. The company employs approximately 50 workers and will use the funds for expansion. Humm makes fermented tea in a 40,000 sq ft production facility. Their product is available in all 50 States. Costco in the Northwest and the Southeast carry the brand. (PBJ)

 

Homebuilding slowed for the third straight month in May, with housing starts falling by 5.5%. Home construction is still 3.2% higher year-to-date. (AP)

 

Consumers are less optimistic than expected in June. The University of Michigan's Consumer Sentiment Index dropped to 94.5 in June (Reuters).

 

A executive order on drug pricing could come out his week.The order may trigger volatility in drug stocks. Healthcare has somewhat quietly-produced the second best sector return year to date (+13.6%). (LPL Research)

Moda Health Plans has sold its Old Mill office building for $25.5 million or $289 per square foot. Moda completed the 88,229 square-foot building in 2008, and 105 employs there. (Bulletin)

 

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



Looking deeper into what the Fed told us on Wednesday they reduced their projection for inflation from 1.9% to 1.7% in 2017. They raised gross domestic product projections from 2.1% to 2.2% for 2017 and lowered the projection for the unemployment rate from 4.5% to 4.3%. (LPL Research)

The scandals continue at Wells Fargo. Officials in its mortgage business were making unauthorized changes to home loans held by customers in bankruptcy, even as the bank was dealing with last year's sales practices scandal. The changes lowered monthly payments but extended the terms. (NY Times)

Import prices dropped 0.3% in May, the steepest decline in 15 months. The decline was driven by falling fuel prices. The price index for imports climbed 2.1% over for the last 12 months. Export prices decreased 0.7% in May, Export prices are up 1.4% over the last year.  (Labor Department)

Oregon-based Nike is trimming 2% of its global workforce.
Nike plans to focus on serving consumers in 12 cities, across 10 countries, with these locals representing over 80% of Nike's projected growth through 2020. (CNBC)

Join us this weekend for Financial Focus Radio Show when Tyler and I will tackle your calls and email questions.

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



In the first quarter of 2017, 400 U.S. CEOs surveyed by KPMG said they are “highly confident” in America’s growth engine over the next three years and see the U.S. as a top growth market.  They credit this to harnessing the power of disruptive technologies like artificial intelligence and machine learning, as well as fending off competition.

Neiman Marcus has been exploring a potential sale. This week it reported its fourth straight quarterly loss in the face of intense competition from online retailers. Same-store sales fell 5% for the quarter. Neiman Marcus posted a loss of $24.9 million in the quarter, compared to a profit of $3.8 million last year. (FBN)

Retail sales had their biggest drop in more than a year in May, down 0.3%.  Over the last year retail sales rose 3.8%.  Some of the drop in monthly retail sales reflected lower gasoline prices. (Reuters)

The cost of goods and services for American consumers fell in May for the second time in three months as inflation continues to slow. The consumer price index, fell 0.1% last month. Inflation over the past 12 months slowed to 1.9% in May from a five-year high of 2.7% just four months ago. (MarketWatch)  

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



Inflation at the wholesale level was unchanged in May. Energy prices fell 3% and food costs declined 0.2%. Prices did rise for services such as car rentals and retailing clothing, jewelry, footwear and accessories.
Core inflation, which excludes food, energy and trade services has climbed 2.1% over the last year. (AP)

Sears is cutting 400 full-time jobs at its corporate offices.
The company is restructuring in an efforts to reduce costs by $1.25 billion annualized. Last week, Sears said it would close an additional 66 stores, adding to the list of 180 closures that was announced earlier this year. Sears stock has shed more than 41%over the past 12 months and is down about 25% year-to-date. (CNBC)

The Chinese fixed income market are under pressure. With slightly slower growth in China, the People's Bank of China eased its tightening program. (LPL Research)

It is the coming wave in food service. Digital ordering is boosting sales at the soup and sandwich chain Panera Bread. It's poised to pass $1 billion in annualized digital sales this year. It expects to double that by 2019. (CNBC)

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



The Vancouver, WA based Papa Murphy’s plans to close up to 16 of its stores by year end. Jean Birch, board chair and interim chief executive replaced Ken Calwell, who took the company public in 2014. Calwell resigned in January. Founded in 1981 Papa Murphy’s, has more than 1,500 franchised and corporate-owned stores in 39 states, Canada and the United Arab Emirates. (OregonLive)

The Nordstrom family is thinking of taking back complete ownership of the company. The board has formed a special committee of independent directors to evaluate the possible change. (The Washington Post)

Buy your next car online? Amazon has started hiring people to sell cars online in Europe. A German trade magazine reports the company plans to run the business out of Luxembourg, and it’s looking at Britain as a possible test market. (CNBC)

The NFIB Small Business Optimism Index for May matched its strong performance in April of 104.5. The Index has been at a historically high level for six straight months. Five of the Index components posted a gain, four declined, and one remained unchanged. Hiring activity is near the highest levels in the 43-year history of the Index.

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



A little cost cutting going on. Ford, the only domestic automaker not bailed out with your tax dollars, is offering buyout packages to about 15,000 workers in North America and Asia as they cut costs. (CNBC)

Emerging Market strength continues and this is why every well diversified and balanced portfolio should have some. The MSCI Emerging Markets Index is now up 19.1% year to date. (LPL Research)

The week ahead. The Federal Open Market Committee meets on Wednesday, June 14th, Flag Day, and will include Chair Janet Yellen's press conference. The Bank of Japan also meets on Thursday. Noteworthy U.S. data due out includes consumer and producer inflation, retail sales, industrial production, and housing starts. (LPL Research)

General Electric Chairman and CEO Jeff Immelt is stepping down. GE shares climbed on the news. The stock is off about 12% year-to-date. John Flannery, current president and CEO of GE Healthcare, has been named CEO of the company, effective August 1, 2017, and chairman and CEO effective January 1, 2018. Flannery, 55, began his career at GE Capital in 1987. (Bloomberg)

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

 



Home-price growth in the Portland area is slowing but still climbed by 1% in March, according to the S&P CoreLogic Case-Shiller home price index. Prices are up 9.2% from a year ago. Nationally, prices rose 5.8% in March. Homebuyers face a slim supply of homes for sale. The median sale price in the Portland was $370,000 in March, it rose to $385,000 in April.


Pendleton Woolen Mills President Mort Bishop III will retire effective June 30th. He has served in the role since 1999 and worked for the family-owned company for 40 years. He will continue to serve on the board. (PBJ)

Amazon plans to hire 1,000 workers for its distribution center in Troutdale. Amazon plans to invest $178.4 million in a robotics fulfillment center. (PBJ)

The CNBC/SurveyMonkey Small Business Survey index posted 60 in the second quarter, on a scale of 0–100. Male small-business owners were found to be more optimistic than females, with a confidence level of 62, versus female small-business owners, with a confidence level of 56. Owners with less than four employees have a confidence level of 58. Those with 50 or more employees scored 67.

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



It’s Friday, that means it’s time for non-farm payrolls: US job growth missed expectations in May, while April’s figure was revised significantly lower.  Employers added 138,000 jobs in May, a report from the labor department shows. That compares with Wall Street expectations of 182,000. The April gain was revised lower to 174,000 from 211,000 previously.  Wage growth was also a tad weaker than forecast: Average hourly earnings were up 2.5 per cent year-over-year. (FT)

 

Crude prices have fallen almost 3% amid fears that the U.S. withdrawal from the Paris accord will trigger more American drilling. Is it already happening? The U.S. oil industry exported a record 1.3M barrels of crude per day onto the world market last week - just a half million barrels less than the cuts OPEC and Russia agreed to make to daily production. (SA)

 

Illinois is on the verge of becoming the first state with a junk-bond rating following downgrades from Moody's Investors Service and S&P Global Ratings. Partisan gridlock is to blame. The state hasn't had a budget in place for the past two years because of a standoff between Republican Governor Bruce Rauner and the Democrat-run legislature. (SA)

 

S&P 500 futures are up 1 and NASDAQ futures are up 11. The MSCI international index is up 3/5%.

Oil is down $1 at $47.49 a barrel.

Gold is up $1 at $1271 a Troy ounce.

 

With Northwest Quadrant Wealth Management, a Registered Investment Advisor, I'm Josh Fenili.


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