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Business News Archives for 2017-07


U.S. factory goods climbed 6.5% in June, the biggest gain in nearly three years. The bulk of the increase came from a 131.2% surge in orders for civilian aircraft. Excluding orders of transportation equipment, which rose 19% overall, durable goods orders edged up 0.2% last month. (Commerce Department)

With lumber prices at $405 it has broken $400/MBF for only the 2nd time in the last 12 years.  So, why are lumber prices surging beyond already-healthy levels in mid-summer?  The answer as always is supply and demand.  This month the new boost in lumber prices is caused by extensive wildfires in British Columbia, accompanied by Canadian mill closures. (Sohn Report)

Coca-Cola plans to stop selling Coke Zero in the US in August, replacing it with a beverage with a different recipe, design, and name: Coca-Cola Zero Sugar. Coca-Cola Zero Sugar is already a hit outside the US, with growth figures reaching the teens. In the US, Coke Zero sales grew 3.5% in 2016, compared with Diet Coke's drop of 1.9%. (Yahoo)

Join us this weekend for Financial Focus Radio when we will talk about these record markets.

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



The declining U.S. dollar is beginning to negatively impact foreign stocks. Since last Thursday, when the European Central Bank issued what was perceived to be somewhat hawkish comments, the euro has increased 1.5% bring foreign markets lower.  The US dollar has declined 8.2%, as measured by the DXY index, since the beginning of the year. This has benefited investors who have held international assets, as the value of the holdings in dollar terms has increased. (LPL Research)

 

Financials and tech strength drive solid earnings upside. With over 50% of S&P 500 companies having reported results, second quarter 2017 earnings are tracking +9.6% year over year, 1.6% ahead of estimates. Beat rates for both earnings (74%) and revenue (70%) are above average. The majority of the upside has been driven by financials and technology, although energy is still expected to make the biggest contribution to growth for the quarter. (LPL Research)

 

Procter & Gamble, maker of Pampers diapers and Crest toothpaste, reported quarterly results of earnings per share of 85 cents on sales of $16.08 billion. Cincinnati-based P&G managed to drive costs lower, which aided in boosting its profit. (CNBC)

 

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

 



This week the focus will likely be on earnings. Corporate earnings are likely to overshadow the Federal Reserve amid the busiest week of earnings season with nearly 40% of the S&P 500 reporting. The Fed holds their two-day monetary policy meeting with no rate hike expected. The U.S. economic calendar includes housing, manufacturing, durable goods, and second quarter gross domestic product. (LPL Research)

36.6% percent of household in 2016 rented, about the 1965 number of 37%.  That according to a report by the Pew Research Center.  U.S. households grew by 7.6 million over the past decade, but the number of households headed by owners remained relatively flat, while households headed by renters grew by nearly 10%.

Summit Bank expanding its current Bend branch by 745 sq ft and adding four new staff members. (Bulletin)

Hasbro makers of Star Wars, My Little Pony and Transformer toys saw sales rise 11% in Q2. U.S. and Canadian revenue grew 16% to 494.4M. The companies operating margin rate grew 60 bps to 10.3%. (Seeking Alpha)

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



Portland’s ban on new bulk fossil-fuel terminals has been rejected by the state Land Use Board of Appeals. LUBA said the zoning ordinance was an unconstitutional restraint on interstate commerce. The ordinance banned new storage facilities with capacities greater than 2 million gallons and prohibited existing terminals from expanding. (PBJ)

Sears announced the launch of Kenmore products on Amazon, as well as the integration of the full line of Kenmore Smart appliances with Alexa. (CNBC)

Oregon’s largest employer, Intel, has eliminated most of its health wearables division. (CNBC)

Leading economic indicators increased 0.6% in June, beating expectations and pointing to an improving economic outlook. (AP)

It took more than 17 years, but the S&P 500 Information Technology sector finally closed at a new all-time high yesterday. The previous record was set on March 27, 2000 and it took 4,354 trading days until that peak was bested yesterday. One thing to remember is: Adjusted for inflation, tech is still 29.8% away from an all-time high. (LPL Research)

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



Chinese gross domestic product came in at +6.9% year over year, above expectations, while industrial production and retail sales came in at +7.6% and 11.0%, respectively. (LPL Research)

It’s the Summer doldrums.  Trading volume has been very light lately. It was the second-lowest volume day of the year in the U.S. on Monday, as just 5 billion shares traded on the NYSE and Nasdaq. (LPL Research)

Housing starts jumped 8.3% to an annual rate of 1.22 million units, the highest level since February. Single-family homes, which accounts for the largest share of the residential housing market, surged 6.3%.  Starts for multi-family housing increased 13.3%.  Building permits surged 7.4%.  (Reuters).

Cascades Company from Canada has opened a $64 million factory in Scappoose. The facility employs 70 persons in the manufacturing of toilet paper and paper towels. (OregonLive)

Summit Bank with a branch in Bend and HQ in Eugene reported a 40% jump in Q2 profits of $960,000. The Summit loan portfolio grew by almost 24%. Deposits rose by $44.9 million, or 19% year-over-year. (Eug Reg Grd)

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



Don Tykeson, a pioneer in Oregon’s broadcasting industry, was 90. At one time he was the owner of Liberty Broadcasting in Eugene and until three years ago owned Bend Broad Band in Bend. Tykeson, was also a founding director of C-Span and grew up on a farm near Newberg. (Bend Bulletin)

With the first 30 company results in, S&P 500 companies are tracking to an 8.1% year-over-year increase, marginally above the 8.0% growth rate expected.  Following Friday's big bank reports, financials have produced a 6.6% upside surprise, above last quarter's 5.5% upside surprise. (LPL Research)

Millions of Americans on Social Security are projected to receive a 2.2% increase or about $28 a month for the average recipient in 2018. This year Social Security recipients received an increase of 0.3%, after getting nothing in 2016. The last time they got a bigger increase was in 2012, when the hike was 3.6%. (SSA)

Goldman Sachs posted a profit of $3.95 per share in the second quarter, on revenue of $7.89 billion. Shares are off over 1% in early trading. (CNBC)

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



Microsoft is closing its Wilsonville Oregon facility where it builds giant touch-screen computers. The company will eliminate 61 jobs in September and another 63 in the following months. (OregonLive)

The Consumer Price Index was unchanged in June as the cost of gasoline and mobile phone services declined. In the last 12 months, the CPI is up 1.6%. (Labor Depart.)

Retail sales fell in June by 0.2%. Down for a second straight month. The number was pushed down by declines in spending at service stations, clothing stores, supermarkets, restaurants and bars and hobbies. Retail sales are up 2.8% year-on-year. (Commerce Department)

Industrial production rose in June by 0.4%. Up for a fifth straight month. Mining output which includes oil and gas increased 1.6% led coal mining and in drilling and support activities. Utilities output was unchanged. Capacity utilization, which measures how fully companies are deploying their resources, rose to 76.6% in June. (Reuters)

U.S. consumer sentiment fell to 93.1. In the July survey, a reading of current U.S. economic conditions is at 113.2. (University of Michigan)

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



Producer prices rose 0.1% in June as increases in the cost of services offset declining energy prices. In the last 12 months, the PPI increased 2.0%.  Energy prices fell 0.5% and food prices jumped 0.6% in June. (Reuters)

Chinese trade data, both imports and exports, were greater than forecast. In general, we look to exports as a sign of global economic health, whereas imports tend to tell us more about the country in question. Chinese exports to other emerging markets were steady, with greater improvement in shipments to developed markets. Exports were led by electronics, while steel exports declined. Chinese imports of oil by volume increased again, suggesting some strength in the Chinese industrial economy. (LPL Financial)

The two hallmarks of 2017 have been a steady climb higher for stock prices amid historically low volatility. The CBOE Volatility Index (VIX) just marked the 45th time this year it has closed between 10.0 and 11.0. This is already a record, topping the 32 times it closed in the 10s in 2006. The VIX has averaged 11.54 so far, this year the lowest annual average ever. The current low record is 12.42 in 1995. (LPL Financial)

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



Research Indicates Obamacare May Have Cost 250,000 Small-Business Jobs. Casey Mulligan, author of “Side Effects: Economic Consequences of Health-Care Reform,” wrote in the Wall Street Journal that according to research he commissioned from Hanover Research, the costs of Obamacare have cost roughly 250,000 small-business jobs, even though two-thirds of those businesses offered health coverage even before Obamacare was passed. (NFIB)

Springfield based Roseburg Forest Products will build a $200 million engineered wood products plant in South Carolina. The 450,000-square-foot plant will be constructed in 2018 on 200 acres near Chester, S.C. The facility is expected to create 148 full-time jobs. Roseburg has more than 3,000 employees, in plants in Oregon, California, Montana, Louisiana and Mississippi. (Eugene Register)

The S&P 500 has officially gone more than one-year without a 5% correction (using closing prices). This is only the sixth time since 1950 and the first time since 1995 this has occurred. The longest streak ever was a nearly 20-month streak ending in July 1996. (LPL Research)

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



Consensus expectations are for S&P 500 Q2 operating earnings per share of +7.0%. We saw +14% in Q1. This would be the fourth consecutive quarterly gain. In the past five years, companies have been beating expectations by roughly +3.5%, if that trends holds, EPS gains could come in near 10%. Thus far, just 5% of companies have reported, with 78% beating expectations.  (LPL Research)

The NFIB Index of Small Business Optimism shows US small business owners’ optimism waned in June due to Congressional inaction on healthcare reform. The index declined 0.9 points to 103.6. The Index remains at a historically high level, but within the Index there are signs of trouble that should be a concern. Fewer business owners expect business conditions to improve, and fewer expect sales to improve. (NFIB)

The Pouting Pundits of Pessimism are now preaching "high debt levels among nonfinancial corporations” as the coming end of the world. Nonfinancial US corporation debt is at a record high of $18.9 trillion. Since 1980, nonfinancial corporate debt has averaged 44.9% of total assets. Right now, these debts total 44.5% of assets, slightly less than average. The record was 50.6 in 1993, right at the beginning of the longest economic expansion in US history. (FTA Advisors)

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



Happy Slurpee Day!

Lone Rock Timber of Roseburg has filed a lawsuit, naming the State Land Board and Oregon Department of State Lands, seeking $1.3 million for out-of-pocket expenses plus $2 million in "lost business opportunity damages" after the state reneged on an offer to sell them the Elliott State Forest. The company also seeks 9% interest on the expenses it says it's owed. The suit alleges Oregon violated its own policies when elected officials "unilaterally and wrongfully terminated" an agreement to sell the land to the company for $220.8 million. (OregonLive)

Investors have yanked $26.7 billion from Goldman Sachs mutual funds in 2017. This makes Goldman the world's worst-selling fund manager globally. (Morningstar/FT)

Apple's market share of selling and renting movies is declining. Their market share is now between 20% and 35%, down from 50% in 2012. (Wall Street Journal)

PepsiCo reported a better-than-expected quarterly profits. Sales in the North America beverage business rose 2% to $5.24 billion. Total profits rose to $2.11 billion, or $1.46 per share up from $2.01 billion, or $1.38 per share, a year earlier. Total sales rose 2.1% to $15.71 billion. (Reuters)

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





The big government jobs report is out and the economy added 222,000 new jobs in June. Of those 187,000 were in the private sector. The unemployment rate rose to 4.4%. (Labor Department)

Ford reported a 15% jump in China vehicle sales in June, its biggest year-over-year increase so far in 2017. (CNBC)

Total mortgage application volume increased 1.4% for the week, but was 26% below one year ago. Refinancing dipped 0.4% for the week. Purchase applications rose 3% for the week and are 6% higher compared with a year ago. The average interest rate for 30-year fixed-rate mortgage was 4.20%. (Mortgage Bankers Association)

NORPAC Foods will eliminate 223 jobs in Salem with the sale of its canning business to Seneca Foods. NORPAC will also close a processing plant in Hermiston and move that work to Brooks and to Quincy, Washington. No word on associated job loses with that closure. (OregonLive)

Join us this weekend for 2 hours of wealth building advice on Financial Focus Radio, when I will be joined by our two Millennial wealth mangers Josh and Sarah.

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

 



The Paychex Small Business Jobs Index fell to 100.10 in June for the fourth-straight month. Wages rose as national hourly earnings for the month were $25.82, up 2.88%, or 72 cents, year over year.

Second quarter earnings season has started and we might be in for a surprise.  About 5% of the S&P 500 have posted earnings so far and profits are up nearly 12% over last year and sales are up 8.5% with nearly 90% percent exceeding estimates. (CNBC)

The yield curve steepened last week for the first time in seven weeks. A steeper yield curve has historically been a positive leading economic indicator. (LPL Research)

Software giant Microsoft is set to layoff thousands around the world to reorganize its sales force. For years the company has focused on selling software for desktops and servers. Now the company wants to put more effort into cloud services. (OregonLive)

Costco reported sales of $12.17 billion in June an increase of 5% from last year. Costco shares have lost 13.21% over the past month, most of it coming after Amazon announced its deal to buy Whole Foods. (AP)

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



The first six months in the books. It was a solid start to the year, with the S&P 500 up 8.2%, the best start to a year since 2013. The year is going down in history as one of the least volatile starts to a year ever. The largest pullback has been only 2.8%--which is the second smallest first-half of the year pullback ever. Also, only four days have closed up or down 1% or more--the last time that happened was in 1972. (LPL Research)

Factories expanded as the Institute for Supply Management manufacturing index rose to 57.8. The ISM index now stands at its highest level since August 2014.
Fifteen of 18 manufacturing industries in the survey posted growth in June, including the furniture, machinery, fabricated metals, petroleum and coal sectors. (AP)

Construction spending in May was flat. Spending was at an annual rate of $1.23 trillion. (Commerce Department)

A new report by Fidelity Investments  says the average women investors performed better than men by 0.4%, in 2016.

California owned winery Ponte Family Estate has acquired Sherwood based Hawks View Cellars which was founded in 2007. Terms of the deal were not disclosed. (PBJ)

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


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