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Business News Archives for 2018-10


Happy Halloween. It is the last trading day of what is been a very volatile October. October 2018 is on pace to be the biggest down month in a decade. (CNBC)  

 

While it has been a rough October for equities, there is a piece of good news for investors: During midterm years, the S&P 500 has gained from the October lows until the end of the year every single year since World War II. That is 18 out of 18 years, with an average gain of 10.6%. (LPL)

 

Earnings results better than headlines suggest. With nearly half of the S&P 500 constituents having reported third quarter results, the numbers have been excellent overall. According to Thomson Reuters, 78% of companies have exceeded consensus earnings estimates, putting the index on track for a 25.2% year-over-year increase in earnings. Resilient earnings estimates amid the stock market decline have left the S&P 500 valued at roughly 15 times next 12 months estimates, similar to the attractive levels reached during the late 2015-early 2016 market correction. (LPL)


Rate hike in December still likely, but odds falling. Fed fund futures currently show investors expect the Fed to increase short-term interest rates when it meets in December. No hike expected at November meeting. (LPL)

 

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



Markets were on a wild ride yesterday as they swung more than 2% intraday. The Dow Jones industrial moved almost 1000 points from its high to its low of the day. Remember volatility is normal even though October has really been extraordinary in its ups and downs. Well diversified long-term investors should not be concerned. (Yahoo Finance)

 

The once great General Electric is under more pressure. The integrated company slashed its dividend to one cent per share. (SeekingAlpha)

 

Coca-Cola’s diet soda sales grew by double digits last year boosting the company’s profit on the bottom line. Increased sales were led by the new Coca-Cola Zero Sugar brand. (CNBC)

 

Just 56 days till Christmas and Walmart, is expecting its best Christmas shopping season ever. The company will be rolling out the “check out with me” option at all stores on Black Friday. This new mobile app will also include a store map. For you thrifty shoppers Walmart won’t be matching Target to give free two day shipping with no minimum purchase required. (CNBC)

 

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



The Wall Street roller coaster is selling tickets again today as U.S. stock index futures post steep declines after a selloff in Asia and Europe. It follows a strong session for the three major U.S. indices, though global stocks are still on track to record their worst weekly losing streak in five years. The latest snapshot of the American economy has just been released, annualized 3rd Quarter growth came in at 3.5%, beating expectations. That puts GDP on track for its best yearly performance since 2005, but marks a falloff from the white-hot 4.2% growth rate recorded in Q2. (SA)

 

FAANG stocks and other tech shares are under pressure this morning following disappointing quarterly reports from Amazon and Alphabet.  While revenue growth soared at its cloud unit, Amazon's revenue and Q4 holiday season outlook fell short of expectations. Google also beat on earnings, but sales came up short, while CEO Sundar Pichai confirmed 48 employees were terminated over the past two years for sexual misconduct. (SA)

 

China's currency weakened to its lowest level in a decade on Friday, against a backdrop of mounting geopolitical tension and uncertainty over the country's trade impasse with the US.  Pressure from ongoing trade tension with the US is weighing on the renminbi, as any reduction in demand for Chinese goods would shrink appetite for the currency. (FT)

 

S&P 500 futures are down 31, and NASDAQ futures are down 147. The MSCI international index is down 1/3 of a %.  

Oil is down $.81 at $66.52 a barrel.

Gold is up $4 at $1236 a Troy ounce.

 

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



Investor sentiment shifted during the European trading day thanks, in part, to upbeat forecasts for fourth-quarter demand from German carmaker Daimler, and strong earnings from the third quarter from French peer Peugeot. US futures have also been buoyed by Twitter, which announced strong earnings in a pre-market report.  The volatility gripping markets comes just ahead of Amazon and Google's parent Alphabet announcing results after the closing bell today, following on from a string of disappointments from the semiconductor sector. The tech-heavy Nasdaq index is on track to post its weakest monthly performance since October 2008, while the S&P 500 has more than wiped out all of this year's gains. (FT)

 

Despite the carnage, earnings news has still been resoundingly positive.  81% of S&P 500 companies have beat on EPS, and 63% have beat on revenue.  We're still on track for 22% year-on-year earnings growth, and 7.5% growth on the top line.  This isn't a prediction, but for those believers in the "peak earnings" narrative, the average US recession doesn't occur for 4 years until after peak earnings. Tesla, Merck, Microsoft, Conoco Phillips, and Visa all higher on earnings beats. (Thomson Reuters)

 

The European Central Bank has signaled that market turmoil and mounting risks to the eurozone economy will not sway policymakers from withdrawing one of the most important strands of their crisis-era stimulus, after Mario Draghi confirmed plans to halt the expansion of its quantitative easing program by the end of this year.  Euro is higher on the news, a welcome sign for US multinationals.  (FT)

 

S&P 500 futures are up 20, and NASDAQ futures are up 88. The MSCI international index is down 1/3 of a percent.  

Oil is up $.43 at $67.25 a barrel.

Gold is up $4 at $1235 a Troy ounce.

 

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



Boeing shares are rising this morning as the company reported strong third-quarter earnings on the back of a robust defense business and more efficient commercial aircraft production. The company also raised its 2018 earnings forecast, in what looks to be a record year for revenue.  The aerospace giant reported adjusted earnings of $3.58 a share, topping Wall Street expectations by 11 cents. Third quarter revenue came in at $25.15 billion, which was over $1 billion more than analysts' forecast. (CNBC)

 

Apple is planning to launch its upcoming TV subscription service in more than 100 countries, pushing into more markets of competitors Netflix and Amazon. The service could debut in the U.S. early next year, with the global rollout coming in the following months, according to The Information. Apple device owners will get free access to the company's original programs.  (SA)

 

October is famed for sudden eruptions of equity woe, but the current version is playing out in slow-motion style. Japan is down almost 9 per cent and China off 7.5 per cent, while Europe's Stoxx 600 index has slid 7.6 per cent and today sits at its lowest point since late 2016. In the US, the S&P 500 is not that far from erasing its gains for the year, while global equities are on course for their worst month since May 2012, when fears of a global slowdown and the eurozone debt crisis delivered a punch across the jaws of investors. (FT)

 

S&P 500 futures are down 4, and NASDAQ futures are up 3. The MSCI international index is up less than a 1/10 of a%.

Oil is up $.25 at $66.68 a barrel.

Gold is down $7 at $1230 a Troy ounce.

 

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

 



Well it's a busy morning for earnings - shares of 3M fell more than 5% in premarket trading after its quarterly earnings and revenue missed expectations.  The company also trimmed its full year outlook.  Caterpillar also dropped more than 5% following the release of its results.  Higher input and freight costs contributed to the disappointing numbers, the stock is now down almost 16% for the month. (CNBC)

 

All in all, earnings season has actually been quite positive so far.  This is the busiest week of the earnings season, with more than 150 members of the S&p500 set to report.  Of the companies that have reported thus far, 80% have topped analyst estimates. 

 

On the positive side of the ledger, Lockheed Martin raised full-year earnings guidance as it reported stronger than expected third-quarter numbers, partly due to rising production of the F-35 fighter plane.  United Technologies raised its full-year earnings guidance for the third time this year as it reported higher than expected third-quarter earnings on strong aircraft and equipment demand.

 

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



Italy said on Monday its plans for a sharp increase in public spending would not threaten the EU's financial stability, in its formal response to Brussels' strong criticism of its budget plans.  The economy minister, insisted the budget - which defies EU fiscal rules - was needed to restart growth in the eurozone's third-largest economy after a decade of economic stagnation.  Yields on Italian debt fell sharply overnight as Moody's left the country's credit rating above "junk" status. (FT).  

The Shanghai Composite closed up 4.1%, on track for its best day since March 2016, following a Friday jump spurred by signals of government support in the wake weaker quarterly growth figures. President Xi further vowed "unwavering" support for non-state firms over the weekend, while the country's stock exchanges committed to help manage share-pledge risks and the government released a plan to cut personal income taxes. (SA)

 

Finally, in local news, price reductions are becoming more common for single-family homes in Bend.  The average number of list-price reductions jumped 18% from 706 per quarter in 2017 to 833 per quarter through the third quarter this year, according to Central Oregon Association of Realtors data.  (Bulletin)

 

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



Target is adding space to its toy business for the holiday season, as it tries to win more toy sales after Toys R Us went out of business earlier this year. (CNBC)

 

US industrial production grew by 0.3% in September. An increase in mining sector activity-which includes oil and natural gas extraction-which has been trending up with oil prices since 2015, helped U.S. industry output increase for a fourth straight month in September. Manufacturing output, the largest component of the index, continued to expand last month also rose for a fourth straight month. (LPL)

 

Housing starts for September that came in modestly below analyst forecasts and prior month figures. Hurricane Florence is credited with disrupting activity in the Southeast, which accounts for about half of starts and fell 13.7% from the prior month; expect Hurricane Michael to impact next month's report. On the positive side, permits for single-family homes were up 2.9% month over month, the biggest gain in a year, suggesting builders have a steady pipeline that could contribute to growth in the fourth quarter as consumer demand, helped by a solid job market and lower taxes, as well as post-storm rebuilding, overshadows headwinds including rising mortgage rates and property prices. (LPL)

 

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



Job openings hit a record 7.14 million in August, according to the Job Openings and Labor Turnover Survey. This indicates companies could face inflationary pressures ahead with a tight labor market. The total number of hires also reached a new record of 5.78 million. Openings dwarfed the total level of workers looking for jobs, which stood at 6.23 million for that month and fell to 5.96 million in September.

 

The National Association of Home Builders index rose one point in October to 68. Anything above 50 is considered positive. The index was unchanged from October 2017. This comes as lumber prices are falling driving down the cost of building a home.

 

Walmart has purchased online lingerie retailer Bare Necessities for an undisclosed amount. (CNBC)

 

A record net 37 percent of biz owners reported raising overall compensation in hopes of hiring and retaining employees in the tight labor market. This surpasses the previous record of a new 35 percent in May 2018. Competition for workers is pushing up compensation as there are more job openings than job seekers. (NFIB)

 

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



The U.S. Postal Service has proposed a 9 to 12 percent increase in fees for the shipping service used by Amazon (CNBC). 

 

Weakness in restaurant receipts weighed on retail sales last month, which fell 0.1% from August, well below consensus estimates for a 0.6% increase. However, the 1.8% drop in consumer spending at restaurants may reflect the impact of Hurricane Florence, and broad strength across most other categories suggests consumption remains strong. Also, retail control-group sales, which are used to calculate gross domestic product, and exclude food services, auto dealers, building-materials stores and gasoline stations, topped estimates with a 0.5% rise month over month. (LPL)

 

Earnings season kicked off Friday. S&P 500 Index companies are expected to report their ninth consecutive increase in profits and third consecutive quarter with an increase of over 20%. We expect strong earnings gains to be driven mostly by solid economic growth, particularly manufacturing, and tax cuts. In addition, higher oil prices should give energy sector profits a boost and the interest rate environment has gotten better for financial companies. This week, 54 S&P 500 companies will report quarterly results.

 

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



For retail investors who are rattled by the upcoming midterm elections. Since 1946, a year after every single midterm election the S&P 500 has been higher. That is 18 for 18. (LPL)

 

Banks kicked off their third-quarter earnings season Friday with mostly well-received results. Loan demand outside of housing is healthy, while consumer credit trends (charge-offs and provisions for loan losses) were solid. (LPL)

 

The S&P 500 lost 5.3% over the two day selloff last week, extending its losing streak to six days. August 2015, Brexit, and early February 2018 had worse two-day stretches. Along the way, the S&P 500 closed beneath its 200-day moving average for the first time in six months. 

 

Amazon will hire 2,000 people in Portland area this fall as it opens new warehouses and delivery centers. 
(Oregonian)

 

Just 75 days till Christmas and USA Today says the “holiday hiring season is in full swing,” noting retailers expect “to hire between 585,000 and 650,000 temporary workers this holiday season, up from last year’s 582,500.” Amazon expects to hire more than 100,000 seasonal employees across the country during the holiday.

 

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



October is known for spectacular crashes (1929, 1987, and 2008), but in reality it's about average in terms of returns. What it really should be known for is volatility. Incredibly, no month has seen more 1% changes (up or down) than the month of October for the S&P 500 going back to 1950. The economy is in excellent shape. By historical standards, interest rates are still fairly low. Pullbacks are normal. Stocks have three to four pullbacks each year (5-10% drops) and at least one 10-20% correction. (LPL)

 

The Consumer Price Index came in weaker than expected. The data show prices rose 2.3% in September vs. the year-ago period, below the 2.7% figure in the prior month. (LPL)

 

International Paper is increasing its dividend by 5.3%. That brings it to $0.50 per share. (CNBC)

The end may be near. Sears has contacted banks in an attempt to arrange financing to allow it to file for bankruptcy after 125 years in business. (CNBC).

 

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



After reaching new record highs just a week ago, markets are selling off hard. Let’s put this in perspective yesterday markets were down about 3% and are down 4% from their all-time highs. While it is been a swift move downward it should not be unexpected. As I reported last month the S&P 500 went over 3 trading months without a 1% move either up or down. That is now in the past.

 

Volatility is a normal and expected part of the market. We do not view this market turn down as the beginning of the end, but rather a normal anticipated and healthy correction in the market. You just have to look back to last January to see how markets react in a rising interest rate environment. 

 

If you have a well diversified portfolio of high quality stocks and bonds this recent market action should give you no concern.

 

September saw the Producer Price Index-a measure of the prices businesses receive for their goods and services-increase by 0.2% month over month. Despite the recent softness, prices at the producer level have been ticking higher since early-2016, though most of the increases have been absorbed by businesses instead of being passed along to consumers thus far. (LPL)

 

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



After returning from the Columbus Day holiday, bond traders bid up the yield on the benchmark 10-year note above 3.25%, a level not seen since 2011. Though higher interest rates tend to weigh on stocks, on the positive side, higher yields benefit savers, who have had significant difficulty finding places to park cash. Also, stocks haven't historically been negatively impacted by higher rates until the 10-year reaches ~5%. (LPL)

 

Though it ticked lower from August's record high, at 107.9, the NFIB Small Business Index came in at its third-highest level in the survey's 45-year history and is the longest streak of small business optimism in history, helped by the recent tax cuts and fiscal policy changes. Among the highlights, a record percentage of small business owners reported raising compensation, and data showed a pickup in investment spending and expectations for higher sales volumes. (LPL)

 

The Kaiser Family Foundation released report found “insurers in the individual health insurance market performed better financially in the first six months of 2018 than they have in all of the years of the Affordable Care Act.”

 

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



The Nobel economics prize was awarded to Americans William Nordhaus and Paul Romer for transforming our understanding of long-term growth factors, including climate and technology changes. (NY Times)

 

Debra Perelman has been appointed the first female Chief Executive Officer of Revlon. Perelman, 44, has worked at Revlon for 20 years. Her father owns about 87% of Revlon. (CNN)

 

Chinese stocks plunged and the yuan fell nearly 1% versus the dollar after markets reopened following a week off. The slide came despite the central bank cutting the required reserve ratio for the fourth time this year to boost growth; lenders may reduce the amount of cash they hold by 1% beginning October 15th. It's still not clear if the extra liquidity can put a floor under the market, which is down more than 15.0% year to date. (LPL)

 

The XHB, the popular homebuilders-tracking ETF, just posted its longest losing streak ever, falling for 13 consecutive sessions amid a breakout in U.S. Treasury yields that injected new risk into the rate-sensitive group. The XHB has tumbled 9 percent in just one month, entering into a bear market. (CNBC)

 

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



It is a question of pay for performance or pay by the hour. Amazon cut stock options incentive-based bonuses for employees when it raised its minimum wage to $15 per hour, but workers will be better compensated under the new policy. 350,000 employees, including 100,000 seasonal workers, will have their hourly pay rate raised to $15 per hour. (FBN)

 

Barnes & Noble is looking to sell their business after many people have approached them with interest. (CNBC)

 

Yamhill County winery, Domaine Serene Vineyards and Winery has filed a lawsuit against Kansas City whiskey maker J. Rieger & Co. to stop using the brand name "Monogram".  The winery claims it secured its rights to be the sole user of Monogram in its industry after it registered the name with the U.S. Patent and Trademark Office in 2006. (Oregonian)

 

Costco reported fourth-quarter earnings per share of $2.36 on $44.41 billion in revenue, slightly higher than expected.  (Yahoo)

 

A rare 60-year-old Macallan whisky fetched $1.1 million at an auction last week. (CNBC)

 

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



The Department of Labor says the US economy added 137,000 jobs in September. The unemployment rate stands at 3.7%, lowest level since December 1969.

 

Dutch Bros Coffee will add 500 more coffee stands over the next five years, with funds gained after selling a minority stake two private equity firm. Founded in Grants Pass in 1992, Dutch Bros now has 300 locations in seven states. (Oregonian)

 

When I was younger they were the leader of the pack. Now there a penny stock. Sears share price has fell below $1 for the first time in the company's history. Sears has lost $11.7 billion since 2010, its last profitable year, and sales have plunged 60% in that time. It has fewer than 900 stores, down from a combined 3,500 US stores when Sears and Kmart merged in 2005. (Money)

 

The fast food chain Burgerville has discovered they are part of a security data breach. Customer using debit or charge card between September 2017 and 2018 are at risk. The company first learned of the data breach on August 22 from the FBI. (AP)

 

Join us this weekend for Financial focus with you when we will discuss “why is my account trailing in the markets?”

 

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



US Stocks rose slightly yesterday as investors got a slew of good economic data about the labor market and the non-manufacturing sector.
 
The payroll company ADP reported that the private sector in the US soared in September as employers added 230,000 jobs in which is the most in any month since February.  The gains were well above what economists had expected.
 
The institute for supply management survey of non-manufacturing firms climbed to a 21 year high, it's highest level in this current 9 year expansion.  The survey of business executives pointed to the strongest US growth last month in more than 2 decades.  The biggest challenge for businesses right now is finding skilled workers.
 
With all of the good economic data bonds across the yield curve sold off as the 10 year Treasury Note yield reached it's highest level since 2011 and the 30 year reached it's highest yield since 2014.

 

With Northwest Quadrant Wealth Management I'm Tyler Simones
 



US Stocks as measured by the S&P 500 traded slightly lower yesterday on lingering trade war worries.

Shares of Pepsi gained 0.5% in heaving trading, after the beverage and snack giant reported fiscal third-quarter profit and revenue that topped expectations.  However, the company cut their full years EPS outlook for the rest of the year.

Shares of Amazon fell 1.7% after the giant online retailer said it was raising its minimum wage to $15 an hour for all U.S. employees, effective Nov. 1.

According to the personal-finance website WalletHub, Bend is the fourth-fastest growing city in the U.S. this year, based on a study that looked at a variety of factors.  Bend ranks 4th in growth for all US cities and is the 2nd fastest growing small city in the US behind Ft Myers FL.

Northwest Quadrant Wealth Management I’m Tyler Simones



US Stocks traded higher on the first day of the 4th quarter after the U.S. and Canada reached an 11th-hour deal to revise the North American Free Trade Agreement.  This brings Canada into a new trilateral agreement that Mexico had agreed to weeks ago.

 

General Electric it has replaced its chief executive, after just over a year in the role, and investors were so ecstatic they shrugged off a profit warning and a plan to take an impairment charge of close to $23 billion.  GE’s stock gained 7% on the news in very active trading.

 

Shares of Tesla Motors soared yesterday as a surprise settlement with the SEC over the weekend allowing the companies outspoken CEO Elon Musk to retain his CEO role.  The stock got another boost from a report that Musk told employees that the company was “very close” to turning a profit.  Tesla shares jumped more than 16% on the news.

 

With Northwest Quadrant Wealth Management I’m Tyler Simones


>>


 



US Stocks ended last week lower but had the best performing quarter since the 4th quarter of 2013, with the S&P 500 gaining 7% in the 3rd quarter.
 
Geopolitical events and the start of earnings season will drive trading in the week ahead.  Italy's anti-establishment government significantly widened its budget deficit for the next year, a move the will certainly anger the European Union.
 
American Homeowners now have a record $6 Trillion in equity in their homes, a figure boosted by surging home prices and a trend of people staying in their homes longer.  That $6 Trillion number is 21% higher than the pre-financial crisis peak in 2006.
 
California Governor Jerry Brown signed a bill yesterday mandating that all publicly traded companies with headquarters in California must have at least one woman on their board of directors by the end of the year.

 

With Northwest Quadrant Wealth Management I'm Tyler Simones  


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