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Business News Archives for 2018-07


US Stocks traded lower yesterday, led lower by the tech heavy NASDAQ which closed at it's lowest level in 3 weeks.
 
Shares of heavy equipment maker Caterpillar traded higher yesterday after the company reported 2nd quarter earnings that rose from a year ago which was a surprise as investors had expected the recently imposed tariffs to hurt CAT's earnings.
 
Shares of the food company Tyson Foods traded sharply lower after the company cut their full year profit guidance on trade uncertainties related to tariffs and volatility in commodity prices.
 
And according to the National Association of Realtors, pending homes sales in the US rose 1% in June which was better than expected.  The housing market increasingly appears to be running on fumes as demand continues to overwhelm supply.

With Northwest Quadrant Wealth Management I'm Tyler Simones



US Stocks closed lower Friday, but were higher on the week thanks to a slew of good earnings reports from some of America's biggest companies.
 
This week will be another busy week for the markets as investors get the July jobs report on Friday and Apple, Tesla and hundreds of other companies earnings reports this week.  All told investors will have to digest 12 major economic reports this week that could be market movers.
 
The Federal Reserve is expected to raise interest rates this week as the have said the economy is growing strongly and inflation is at their 2% target making more rate hikes this year likely.
 
US Consumers are paying more for products from R.V.'s to soda as tariff's on metal and parts are putting pressure on US manufacturers. US Steel and aluminum prices are up 33% and 11%.
 
With Northwest Quadrant Wealth Management I'm Tyler Simones
 



The Commerce Department said orders for non-defense capital goods excluding aircraft rose 0.6 percent last month. Business spending on equipment has risen since the fourth quarter of 2016. Business spending on equipment is being supported by the Trump administration's $1.5 trillion income tax cut package, which came into effect in January.

Mattel lost 56 cents per share last quarter. The toy maker’s revenue also missed forecasts, hurt by the Toys R Us liquidation. The company will be cutting 2,200 jobs or about 22 percent of its global non-manufacturing workforce. (CNBC)

U.S. economy remains the standout. The dip in Japan's manufacturing purchasing managers' index last month (to 51.6), coupled with stronger readings and slight increases month over month in the U.S., continue to point to the U.S. as the global growth leader. However, Europe's reading (55.1), which is in line with the U.S. (55.5), did stabilize after a sizable drop earlier this year while broader data in Europe has improved in recent months relative to expectations. (LPL)

Join us this weekend for Financial Focus Radio. Check listings at www.financialfocusrasdio.com .

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



Manufacturing data shows solid growth, but evidence of tariff impacts have started to emerge. The U.S. purchasing managers' index (PMI) data was 55.5. However, average prices charged grew at the fastest pace on record amid increases in input costs, as survey respondents noted higher raw material and fuel costs. Suppliers' delivery times were also the longest on record amid low inventory and capacity constraints, showing that supply chain constraints are causing significant disruption. While manufacturing growth has been strong this year, the surge in prices and supply chain disruptions could curb further economic activity. (LPL)

The Commerce Department reports new home sales dropped 5.3 percent month, the lowest level since October 2017. The median new house price fell 4.2 percent to $302,100 in June from a year ago. There were 301,000 new homes on the market in June, up 1.7 percent from May. Supply is just over half of what it was at the peak of the housing market boom in 2006. Nearly two-thirds of the houses sold last month were either under construction or yet to be built.

The Mortgage Bankers Association says volume was 12.6 percent lower than a year ago. Mortgage applications to purchase a home is 2 percent higher than last year.

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



It is the busiest week of earnings season. The Dow has a three-day losing streak, but the S&P 500 is coming off its first gain in three days and the Nasdaq saw its first gain in four sessions yesterday. (CNBC)

Consensus estimates are calling for a 21% year-over-year increase in S&P 500 Index earnings for the quarter, setting up a second-straight quarter of 20+ growth. Should results come in ahead of expectations, it would mark the 37th consecutive quarter of earnings exceeding expectations. Tax cuts, strong manufacturing activity, a weaker U.S. dollar and higher oil prices all point to strong results. With 87 S&P 500 companies having reported, the season is off to a good start: 84% of companies have exceeded earnings estimates. (LPL)

Papa John’s has adopted a shareholder rights plan which would be implemented if a shareholder amasses a 15 percent stake in the company. The plan is designed to prevent a shareholder from gaining control of the pizza chain and is seen as a move to thwart founder John Schnatter from taking control. (CNBC)

Alphabet reported a profit of $11.75 per share. Revenue rose 25 percent yoy, helped by a 58 percent jump in paid clicks. (CNBC)

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



President Trump said he is ready to go with tariffs on $500 billion in Chinese imports in an effort to drive an agreement. Tariffs on just $34 billion in Chinese goods have been implemented thus far, with $16 billion coming soon and an additional $200 billion previously threatened. With China only buying about $130 billion in U.S. goods, Chinese retaliation would have to come in other forms, such as regulatory actions, boycotts, currency devaluation, U.S. Treasury sales, or other non-tariff actions. These latest developments may bring the tit-for-tat closer to its end, though resolution may take the bulk of the summer. (LPL)

The Conference Board's Leading Economic Index (LEI), one of our favorite economic indicators, painted a continued strong backdrop for future economic growth, as it rose 0.5% month over month and 5.8% year over year. While the yield curve has been getting all the attention recently, the LEI has a solid track record of predicting recessions. (LPL)

Cal-Maine Foods, the nation’s largest egg producer posted a quarterly profit of $1.48 per share. Cal-Maine said the market may see additional pricing pressure to due to an expected increase in the U.S. laying hen flock and potential excess egg supply. (CNBC)

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



Business confidence remains strong based on the latest survey data from the National Federation of Independent Business. The percentage of small business owners indicating it is a good time to expand dipped slightly from May to June but remains above the peaks of the past three decades. Strong data from the Institute for Supply Management tells the same story, even though all Federal Reserve (Fed) districts cited concerns about the continued tightening of the labor market, inflationary pressures, and tariffs in the Fed's Beige Book. (LPL)
 
The Dream on Hold, a study by RENTCafe reports that families are “being squeezed into rental properties.” Data shows that homeownership by families decreased by nearly 3.6 million over the last decade, while the number of families living in rentals increased by 1.9 million. 
 
More than 12.8 million Americans are currently working in the US manufacturing industry. The last time that many Americans were working in manufacturing was back in December 2008. (Breitbart)
 
RLK and Company, which owns Timberline Lodge has purchased Summit Ski Area which sits just off U.S. 26 in Government Camp. Neither party disclosed the purchase price. (OregonLive)
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.    
 


Industrial production in June rose 0.6%, reversing a 0.5% decline in May. Manufacturing output climbed 0.8%, the most in four months and capacity utilization continued to rise. The rebound in industrial production is a signal of economic growth and could help lift the second-quarter gross domestic product (GDP). Currently, the Bloomberg consensus for the second-quarter GDP is 4.0%. (LPL)
 
According to the Association of Equipment Manufacturers equipment sales in the first half of 2018 are up sharply over last year, led by a 20.5% increase in combine sales. Total tractor sales for 2018 so far are up 6.5% compared to the first half of 2017.
 
Berkshire Hathaway eliminated its own restrictions on buying back the company’s stock. A new policy allows buybacks to be authorized when Berkshire’s Warren Buffett and Charlie Munger feel the repurchase price is below Berkshire’s intrinsic value. (Reuters)
 
The Commerce Department said U.S. homebuilding fell to a nine-month low in June and permits declined for a third straight month. Housing starts fell 12.3 percent. Building permits dropped 2.2 percent. Single-family homebuilding decreased 9.1 percent. Starts for the volatile multi-family housing segment plunged 19.8 percent.
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.                                      
 


The Eager Report says entrepreneurs registered 301 new businesses in Bend in June a 21% increase over registrations in June 2017. Bend continued to lead the way in large city business registrations, with one business registered in February for every 303 residents, the highest rate of business registration among larger Oregon cities. Statewide, the average was a new business for every 690  residents.
 
According to the Bureau of Economic Analysis foreign investors spent $259.6 billion to acquire, launch, and expand businesses in the United States in 2017. That's down from a historic high of $439.5 billion in 2015. The largest of last year's foreign investment came from Canada, followed by the United Kingdom and Japan. (CNN)
 
Investment in the global energy sector totaled $1.8 trillion in 2017, marking a 2 percent drop from the previous year. A drop in spending on power plants offset a moderate increase in money flowing into the electric grid. (CNBC)
 
The USDA released its World Agricultural Supply and Demand Estimates. It estimates soybean stocks for 2018-19 at a record 580 million bushels, up about 50 percent from its previous estimate.
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.                                      
 



The Labor Department said U.S. producer prices increased 0.3 percent in June. In the last 12 months the PPI is up 3.4 percent, the largest gain since November 2011. Inflation is gradually rising against the backdrop of a labor market that is near or at full employment.

Oregon placed 19th in the CNBC best states for business, that is down two spots from last year. The report says, “The Beaver State has a great economy, but heavy regulation holds back business success.” In the factors considered Oregon did not score any A’s and got an F for cost of living and D+ for business friendliness.

Workers are leaving their jobs at the fastest rate since the Internet boom and they are landing higher pay and more satisfying work as a result. According to the Labor Department, 3.4 million Americans quit their jobs in April. Workers are emboldened by the strong economy and low unemployment.

Trucking companies increased rig orders by 18.5% in June over May, according to data from ACT Research. Big rig orders are driving factory backlogs to their highest levels in almost twenty years, and the June 2018 rig orders are roughly double the number ordered the previous June.

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



NFIB’s Small Business Optimism Index for June was the sixth-highest reading in survey history. The index saw a 0.6-point decrease to 107.2. Since December 2016, the Index has averaged 105.4, significantly above the 45-year average of 98 and nearing the all-time high of 108.0 in July 1983.
 
Bizwomen reports customers who tried but were unable to purchase a product at a physical store because it was out of stock account for more than 20 percent of Amazon’s North America sales. IHL Group found Amazon Prime members who can’t find what they want in a store are 52 percent more likely than other consumers to buy what they need online.
 
NFIB reports the share of US firms with open positions rose to 36 percent in June, matching November 2000 as the highest in monthly records back to 1973. Twenty-one percent of small-business owners said finding qualified workers was their biggest problem, also near a record level.
 
Kah-Nee-Ta Resort & Spa, owned by the Confederated Tribes of Warm Springs is closing and will permanently lay off 146 employees. The closure includes the lodge, spa, hotel and RV park. (PBN)

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



One of the most popular market-related discussions recently is on the yield curve. The reason being the yield curve (as measured by the 2-10 year Treasury spread) is at its flattest level since right before the financial crisis. Also, the past nine recessions have all been preceded by an inverted yield curve. It is important to note that the yield curve is not currently inverted, but that hasn't stopped the masses from focusing on it. Here's the catch, looking at the past five recessions shows that a recession didn't officially start until an average of more than 21 months after the yield curve initially inverted. The S&P 500, meanwhile, added an average of nearly 13% over this timeframe and was higher in every single instance.
(LPL)

Shopping malls across the U.S. haven’t been this empty in six years. The mall vacancy rate for the second quarter is 8.6% up from 8.4% in Q1. Retailers such as, Sears, J.C. Penney and Toys “R” Us have all announced closures this year. (LINKedin)

Pepsi reported quarterly earnings. Their snack business, which includes brands like Doritos and Tostitos, grew 4 percent. Its North American beverage business, which includes Gatorade and its namesake cola, dropped 1 percent. Total revenue rose 2.4 percent. (CNBC)

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



Ford's slump in China intensified, with vehicle sales tumbling 38 percent in June and the automaker recording its worst ever first-half there as buyers shunned its aging models. (Reuters)

Roughly 70 percent of all Chinese fireworks entering the United States come here under the control of a Chinese businessman who has used his influence to raise prices and block competitors. The average daily fireworks containers shipped from China to the US in April and May of 2018 was 108. That is 241 million pounds of fireworks. (Wash. Post)

Home prices jumped 7.1 percent annually in May, according to CoreLogic. That's the biggest jump in four years. The median price of an existing home sold in May was $264,800. The supply of homes for sale has been dropping on an annual basis for the past 36 months.

Manufacturing remains a bright spot. The June ISM Manufacturing Index came in at 60.2, better than last month. The bottom line is the trade concerns didn't appear to slow down manufacturing. Manufacturing is about 10% of the overall gross domestic product. (LPL)

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



The U.S. and China slapped levies on $34 billion of each other’s exports, the first tangible shots in a trade battle that both sides are bracing to fight for months—if not years.  The new levies took effect after midnight Eastern Time in the U.S. In response, a commission of China’s State Council said it applied tariffs on 545 items “including agricultural products, vehicles, and aquatic products,” according to state-run Xinhua News Agency.  (WSJ)
 
A better than expected jobs report this morning: the unemployment rose to 4% in June, ticking up from 3.8% from the month before. While economists had expected the jobless rate to hold at that level--the lowest since 2000--the increase was largely due to 601,000 Americans entering the labor force. (FT)
 
The EU is preparing a new list of duties against the U.S. in case President Trump moves ahead with tariffs on European cars, FT reports. It reportedly includes levies worth €18B, which will target staples like ketchup, as well as frozen fish, raisins, suitcases and adhesive bandages.
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.



Oregon tech company Radisys, has been sold for $74 million to Reliance Industries Limited. Radisys sells communications networking equipment. Radisys had 600 employees at the end of last year. Just 50 were left at its Hillsboro headquarters. (Oregon Live)

The State of Oregon projects that Central Oregon will have fastest job growth in the state over the next ten years. If you've tried to hire a contractor lately, you won't be surprised to learn that the biggest job growth is projected in construction. (Eager Law)

Boeing is acquiring the commercial aircraft arm of Brazilian plane maker Embraer for $4.75 billion. (Reuters)

Amazon says its annual Prime Day will begin on July 16 and run for 36 hours. Prime Day will include deep discounts at Whole Foods. (CNBC)

Oregon is beer happy so this may have some appeal. The typical alcohol content in beer is between 4 and 8 percent, but for $200 per bottle, Samuel Adams offers a deluxe beer that packs 28 percent alcohol content. That translates to 56 proof, the same as Amaretto. The brew is illegal in 15 states. (CNBC)

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



Welcome to the third quarter. Historically the third quarter can be tricky for stocks, but especially so during a midterm year. In fact, going back to 1896 and the start of the Dow, this is the second worst quarter of the four-year presidential cycle. (LPL)

The shortened holiday week will likely see below-average trading volume with traders heading to beaches and barbecues. But that does not mean the economic calendar is quiet. In fact, quite the opposite with the ISM manufacturing data and the jobs report on Friday. (LPL)

The 2018 2Q Zillow Home Price Expectations Survey, found that surveyed economists and real estate experts expect the U.S. will enter a recession in 2020. (FBN)

Too early to think of Christmas? Not for Kohl’s, which is getting a jump on finding seasonal workers for the back-to-school and holiday seasons. Faced with a tight labor market, the retail giant says it’s the earliest it has ever started searching for seasonal employees. Although Kohl’s hasn’t disclosed how many workers it plans to hire, about 70,000 additional workers were employed for the 2015 and 2016 seasons. (LinkedIn)

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



Toys R Us closed its doors in the U.S. on Friday. The defunct company still must sell its intellectual property. (CNBC)

Nestle is being urged by investor Daniel Loeb’s Third Point hedge fund to split into three divisions. They want Nestle to split into separate beverage, nutrition, and grocery units. (CNBC)

Kroger the parent company of the Fred Meyer is about to test a fleet of driverless cars designed to lower delivery costs. Customers will be able to order groceries from a mobile app. After the order is placed, a driverless vehicle will deliver the groceries at a curb, requiring the customers to unload. The vehicles will be opened with a numeric code. (Oregon Live)

Oregon workers earning the minimum wage got a raise yesterday. The minimum wage in the Portland climbed 75 cents, to $12 an hour. In Deschutes and Lane County minimum wage climbed to $10.75 and hour. In the rest of eastern Oregon minimum wage rose to $10.50 an hour. Sunday's increase is the second in a series of annual hikes approved in 2016. Oregon has one of the highest minimum hourly wages in the nation. (Oregon Live)

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


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