Business News


The Dow climbed to another record high yesterday as investors dumped Big Tech stocks and bet on companies leveraged to a strong economic comeback. The divide between value stocks in the market and growth was significant with the tech-heavy Nasdaq Composite losing 2% as the Dow soared.

 

Bad news for house hunters: Hiring has slowed for construction workers.  Homebuilders have slowed their hiring pace, even as buyers are clamoring for properties to purchase.  Analysts and economists say the slowdown is a reflection of the exceptional challenge’s construction firms are facing in sourcing building materials.  Employment in the broader construction sector was flat in April, according to the Bureau of Labor Statistics.

 

Newly unemployed Oregonians will get 9% more from the state each week beginning in July, with weekly benefits rising to as much as $1,033 for some workers.  The higher benefits are the result of an annual adjustment to the size of state unemployment benefits tied to Oregonians’ average wages.  When pay goes up for working Oregonians, benefits go up for the unemployed.  The new payments kick in after July 4, according to the Oregon Employment Department, and only apply to new jobless claims. It won’t change the benefits for those who filed claims before then.



A ransomware attack forced the closure of the largest fuel pipeline here in the US over the weekend. Colonial Pipeline, which operates a 5,500-mile system, said they were forced to halt the transport of fuel from the Gulf Coast to the Northeast on Friday as they took certain systems offline to contain the threat.  US fuel prices are trading sharply higher on the news. 

 

Home prices are sharply accelerating in the U.S., with the average price of newly constructed homes hovering around $400,000. And thanks to skyrocketing lumber prices — which are up over 300% in the last year — prospective homebuyers want to know if they should prepare for even higher prices.  The National Association of Home Builders estimate’s that lumber prices are adding at least $36,000 to the average purchase price of a new home.

 

So far, US companies have been blowing past expectations this earnings season, with corporate profits easily exceeding estimates as demand rebounds from the worst points of the pandemic last year. According to FactSet data, nine in 10 S&P 500 companies have reported first-quarter results, and 86% of those companies have topped expectations. If that holds through the next couple weeks, it would mark the highest percentage of earnings beats since FactSet began tracking the metric in 2008. 



Hiring was a huge letdown in April, with nonfarm payrolls increasing by a much less than expected 266,000 and the unemployment rate rose to 6.1% amid an escalating shortage of available workers. Dow Jones estimates had been for 1 million new jobs and an unemployment rate of 5.8%.  Many economists had been expecting an even higher number amid signs that the U.S. economy was roaring back to life.  However, markets had only a mild reaction to the bad news, a sign that investors expect the Federal Reserve to keep its ultra-easy policies in place as well as belief that the big miss likely was a short-term phenomenon.

 

It's been a whirlwind week for Peloton and its investors. The company sells high-end exercise bikes and treadmills that are touted for their library of workouts and access to live classes. Things for the company really took off during the pandemic as consumers sought the convenience of at-home and on-demand workouts, sending shares of the company up 434% in 2020.  Shares are now more than 50% off their high after the company recalled its newest treadmill.  PTON still has a $26bn market cap, so we’ll revisit this one in the years to come.   

 

Copper prices hit a record high on Friday in the latest leg of a broad rally across commodity markets sparked by the reopening of major economies and booming demand for minerals needed for the green energy transition. Copper, used in everything from electric vehicles to washing machines, rose as much as 1.4 per cent to $10.361 a ton, surpassing its previous peak set in 2011 at the height of a previous commodities boom.  The price has more than doubled from its pandemic lows in March last year due to voracious demand from China, the biggest consumer of the metal, and also investors looking to bet on a big uptick in the global economy and protect their portfolios against potential for rising inflation.



Stocks of COVID-19 vaccine developers are trending lower after U.S. Trade Representative Katherine Tai announced support for a waiver of intellectual property protections.  A number of large pharma companies, including vaccine developers Pfizer, Johnson & Johnson, and AstraZeneca say waiving IP rights wouldn't solve supply problems in the short term because contract producers lack familiarity with the new technology behind the shots.

 

Risks of rising prices are intensifying across the economy as a growing number of companies warn that supply shortages and logjams will compel them to raise prices. In fact, tight inventories have seen prices surge for raw materials, ranging from semiconductors and steel to lumber and cotton.  As commodities and materials become more expensive, the bigger question at the table is whether faster inflation sticks around. Putting it in perspective, a sheet of 3/4" plywood at Home Depot is now selling for around $60 (depends on location), up from about $30 before the pandemic - that's a 100% increase. Investors and policymakers alike are hoping that the price hikes prove transitory.

 

The U.S. employment picture improved sharply last week, with first-time claims for unemployment insurance hitting a fresh pandemic-era low.Initial claims totaled 498,000 for the week ended March 1, against the Dow Jones estimate of 527,000. That was down from the previous week’s total of 590,000, which saw a substantial upward revision from the initially reported 553,000.



"It may be that interest rates will have to rise somewhat to make sure our economy doesn't overheat," Treasury Secretary Janet Yellen said on Tuesday, triggering a selloff in the tech sector which depends on low rates for its lofty valuations. The Nasdaq closed 2% lower on the news, before a correction was issued by the press office. "Let me be clear, it's not something I'm predicting or recommending," Yellen later explained.  The Fed Chair has previously insisted that he's "not even thinking about thinking about higher rates" until the labor market recovers from last year's economic downturn.

 

Another crypto craze is taking the market by the storm as a parabolic rally for altcoins (cryptos other than bitcoin) took the value of all digital tokens past $2.3T. Dogecoin a crypto that started as a joke, is now changing hands at 68 cents, up about 63% in the past 24 hours, 131% over the past week, and over 11,000% so far in 2021.

 

Private job growth accelerated in April but fell a bit short of Wall Street expectations, according to a report Wednesday from payroll processing firm ADP.  Companies added 742,000 workers for the month, a jump from March’s upwardly revised 565,000 but a bit shy of the 800,000 forecast from economists surveyed by Dow Jones.

 



Banks that are flush with cash is usually a good thing, as that generally means lots of lending, but something else is awry in the U.S. financial system. In recent quarters, big banks have detailed weaker-than-expected loan demand and have pushed out the timeline of when they predict it to bounce back. In the absence of lending, extra deposits can be costly for banks, putting pressure on their regulatory ratios and eventually requiring them to hold more capital.  The four largest U.S. banks - JPMorgan, Citi, Bank of America and Wells Fargo - amassed nearly $1T in additional deposits last year due to the scale of fiscal stimulus. Their latest earnings report also revealed that deposits collectively grew by 15% to $6.9T as of March 31, but their combined loan holdings fell 10%.

 

Hillsboro-based Parr Lumber is acquiring Deer Park, Washington-based Evergreen Truss & Supply.  Parr Lumber says it's expanding into the truss manufacturing market as part of its three-year plan to grow its business.  Evergreen Truss & Supply has been providing products to Eastern Washington and Northern Idaho since 1987.

 

Pfizer made $3.5bn from Covid-19 vaccine sales in the first quarter and boosted its full-year expectations for revenue from the jabs to $26bn from $15bn as it reported its quarterly earnings on Tuesday. The pharmaceutical company, which splits its Covid vaccine profits with its development partner BioNTech, raised its overall full-year revenue guidance to up to $72.5bn from $61.4bn, mainly due to contracts signed for the delivery of 1.6bn doses in 2021.



A barrage of earnings reports arrives this week. The Q1 earnings season so far has seen a record 87% of S&P 500 companies top estimates and earnings growth on average of 46%. Economic reports to watch include updates on ISM manufacturing, construction spending, factory spending and a the March jobs report at the end of the week. On the corporate calendar there are key events for Merck, Dell Technologies, CarMax, and Union Pacific. 


The Honest Company is looking to raise as much as $439M in an IPO next week that could give co-founder Jessica Alba a stake valued at about $96M. Honest Company sells baby products, cleaning supplies and cosmetics. The company plans to sell 6.5M shares and existing shareholders will sell 19.4M shares in an expected range of $14 to $17. At the top end of the range, Honest would have a market value of $1.54Bn.

Verizon is exploring a sale of assets including Yahoo and AOL, as the telecommunications giant looks to exit an expensive and unsuccessful bet on digital media.  The sales process, which includes private-equity firm Apollo, could lead to a deal worth $4 billion to $5 billion, a loss of about 50% based on the initial purchase price.  
 



Economic activity boomed to start 2021, as widespread vaccinations and more fuel from government spending helped get the U.S. closer to where it was before the pandemic struck.  Gross domestic product, the sum of all goods and services produced in the U.S. economy, jumped 6.4% for the first three months of the year on an annualized basis. Outside of the reopening-fueled third-quarter surge last year, it was the best period for GDP since the third quarter of 2003.

 

As expected, the U.S. central bank decided to keep short-term interest rates anchored near zero as they continue to buy at least $120 billion of bonds each month. The latter part of policy is a two-pronged effort to support an economy that grew strongly to start 2021 as well as to support market functioning at a time when 30-year mortgages still go for around 3%.  Despite noting the economic strength as well as inflation that is on the rise, the policymaking Federal Open Market Committee unanimously decided to make no changes in its approach and gave no indications that things will change anytime soon.

 

Apple reported another blowout quarter for earnings, announcing companywide sales up 54% over last year, and significantly stronger profits than Wall Street expected. 


Ford beat Wall Street’s expectations for the first quarter and raised their earnings guidance for the year despite an ongoing global chip shortage depleting vehicle inventories and causing the company to shutter some of their factories.
 



Yesterday after the market close investors a slew of corporate earnings announcements including Microsoft, Google, and Starbucks who all blew away expectations.

 

Home price gains continue to outpace expectations, as tight supply and strong demand lead to bidding wars.  Nationally, prices in February rose 12% year over year, up from 11.2% in January, according to the S&P CoreLogic Case-Shiller home price index.  The 20-city composite saw gains that were in the double digits, except Chicago and Las Vegas. The cities with the largest gains continue to be Phoenix, San Diego and Seattle.

 

Consumer confidence rose sharply for a second straight month, hitting the highest level since the pandemic began, as the rapid rollout of vaccines and another round of U.S. financial support for Americans boosts optimism.  The Conference Board reported that its consumer confidence index advanced to a better-than-expected 122 in April, up from 109 in March. It was the strongest reading since the index stood at 133 in February 2020, right before the COVID-19 pandemic struck in the United States.



U.S. orders for long-lasting durable goods rebounded in March after a poor showing in the prior month, but shortages of key supplies are still hampering manufacturers as they race to keep up with rising demand from customers.  Orders for durable goods rose 0.5% last month. These are products such as electronics, appliances, machines, cars and other transportation equipment meant to last at least three years.

 

Apple released iOS 14.5, their big new software update for iPhones yesterday.  The update adds a lot of new features, such as updates to Siri, Podcasts, Apple News and support for the latest game console controllers.  But the one that’s been grabbing headlines is Apple’s new privacy change, which gives users more transparency and control over apps that want to track them for advertising.  Facebook in particular has been worried about the privacy change, as it could limit its ability to effectively target ads to iPhone users.  Facebook has waged a campaign against the change and appears set to lose revenue as a result of it. 

 

Shares of Tesla are higher after they reported record net income of $438 million in the 1st quarter, as well as earnings of 93 cents per share on $10.39 billion in revenue, which was 74% higher than a year ago.
International Stocks 
 



President Joe Biden plans to propose raising the capital gains tax rate for the highest earners to 39.6%, rising to 43.4% when Obamacare surtaxes are included. Biden, following through on a campaign promise to tax the wealthy more, is betting the policy will be popular enough to win passage through Congress. While stocks slumped on the Bloomberg News report yesterday, Wall Street is reacting relatively calmly to the plan, with many pointing to the likelihood of long negotiations.

 

Commodity prices have risen over the last few months, but one in particular has been on a major rip: Wood. Lumber futures (LB1:COM) are used by a variety of traders to lock into prices and hedge against future risks. The contracts are up about 50% this year, currently trading at $1,324.50 per thousand board feet. That's well above the average prices have been for the past three decades.  In late November, the U.S. Commerce Department lowered duties on Canadian lumber coming into the U.S. by more than half, from 20% to 8.9%.

 

Intel comfortably beat Wall Street expectations in its latest quarter as continued strong sales of PCs during the pandemic made up most of the ground lost from weaker data center demand. 

The report revealed sliding profit margins and escalating capital spending at Intel as it prepares an attempted turnround.  The results were the first under chief executive officer Pat Gelsinger, who laid out an ambitious plan last month to put Intel back at the forefront of chip manufacturing, while also plotting a strategy to become a chip “foundry” carrying out manufacturing for other companies.



A new term is hitting financial markets called "swarm trading." We've seen the trend many times over the past year, ranging from the GameStop and AMC short squeeze to the Hertz bankruptcy bid-up and Kodak craze that preceded it. Other events that did not fare as well was the highly publicized "Doge Day" this week that was supposed to take the crypto to $1. The tactic sees people pile into these names, ignoring fundamentals, technicals and other catalysts, until the last trader is left holding the bag.  One example, Hometown International  a deli located in a Philly suburb called Paulsboro, generated only $35,748 in sales over the last two years, but is publicly listed and valued at over $100M.

 

The U.S. jobs market recovery accelerated its pace last week as fewer Americans headed to the unemployment line, the Labor Department reported Thursday.  First-time claims for unemployment insurance totaled 547,000, well below the Dow Jones estimate for 603,000 and a new low for the Covid-19 pandemic era.

 

In earnings news: American Airlines posted its fifth consecutive quarterly loss on Thursday, while Southwest Airlines swung to a profit, boosted by federal payroll aid.  Both carriers have noted an improvement in travel bookings and plan to increase flying during the peak spring and summer months as more people are vaccinated against Covid-19 and tourist attractions reopen.



U.S. stocks fell for a second straight day yesterday as strong corporate earnings failed to boost a market already near record highs, while an alarming rise in global Covid cases raised concerns about the global recovery.  Reopening plays such as airlines, hotels, and cruise line operators led losses.
 
Shares of Johnson & Johnson are higher following better-than-expected earnings.  The company also reported $100 million in first-quarter sales of their Covid-19 vaccine that’s on hold in the U.S. while health regulators investigate a rare blood-clotting issue.

 

Apple held their first product launch event of the year yesterday.  New high-end iPad Pro models lead Apple’s hardware product announcements. During the pandemic, Apple saw big iPad sales growth as consumers looked for new computers and tablets so they could go to work or school from home.  Apple also previewed their iOS 14.5, a significant update to the iPhone software that includes new emojis, features to make unlocking your phone with a mask easier and a privacy update that could upend the mobile advertising industry.  It’s expected to be released in the next few weeks.
 



On tap this week are earnings from a broad swath of Corporate America, including AT&T, Coca-Cola, IBM, J&J, Netflix and Lockheed Martin. Just one week into the season, companies are already beating estimates by a wide margin of more than 84%, according to Refinitiv, which projects Q1 earnings growth will surge 24% from a year earlier. Particular attention this time around will also center around margins. Those will determine whether rising costs are pressuring profits or suggest a buildup of inflation in the economy, but could also signal whether supply chain shortages are affecting companies' bottom lines. The impacts from the reopening theme are also likely to show up in reports, while stock buybacks are set to soar with many U.S. corporations sitting on a cash hoard.

 

Ant Group is exploring options for founder Jack Ma to divest his stake in the fintech giant and give up control, Reuters reported, citing meetings with Chinese regulators. The decision would help draw a line under Beijing's scrutiny of the business after it pulled Ant's listing in November, which was set to be the world's largest IPO. Ant denies that a divestment of Ma's stake has ever been under consideration, but then again, a lot of things related to the crackdown on Ant has been happening behind closed doors.  Ma's fight with Chinese authorities is another example of the escalating tensions between the state and China's private sector as President Xi exerts tighter control over the economy.

 

The unprecedented build-up of oil inventories during Covid-19 lockdowns last year is almost gone. While the amount of stored oil moves close to its five-year average, the outlook still remains uncertain. OPEC and its allies are looking to revive some halted supplies and there are concerns about a surge in U.S. production. There are also worries about the demand outlook, with the worsening Covid situation in India, a key crude importer, keeping a lid on prices today.



U.S. stocks climbed to record levels yesterday after key companies reported strong earnings and fresh economic data pointed to a rebound in consumer spending.

 

Manufacturing remains a bright spot in the US economy as the Manufacturing gains in March were broad based.  U.S. industrial production rose 1.4% in March, after a revised 2.6% fall in the prior month that was caused by severe winter weather.  Production was held down by a steep decline in output from power utilities, as weather switched from unseasonably cold to unseasonably warm.  Manufacturing output rose 2.7% in March after a 3.7% decline in the prior month.

 

The number of Americans applying for unemployment benefits tumbled last week to 576,000, a post-COVID low and a hopeful sign that layoffs are easing as the economy recovers from the recession.  The Labor Department said that applications fell by 193,000 from 769,000 a week earlier. Jobless claims are now down sharply from a peak of 900,000 in early January.  New jobless claims declined in Oregon, too, but at a much slower rate. Nearly 7,900 Oregonians filed new applications last week, down from more than 9,000 in each of the prior two weeks.



Stocks are higher again this morning after the Commerce Department Report that showed retail sales surged 9.8% in March as additional stimulus sent consumer spending soaring.

 

The cost of imports surged in March for the fourth month in a row and added to growing inflationary pressures in the U.S., as a resurgent economy spawns strong demand for a host of goods ranging from lumber to computer chips to new cars.  The import price index leaped 1.2% in last month.  The cost of imports began to surge at the end of last year. Rising oil prices were the chief cause at first, but now the prices of many goods and services are increasing as demand rebounds and supplies fail to keep up.

 

Shares of Goldman Sachs, JP Morgan, Wells Fargo, and Bank of America all traded sharply higher as all three banks reported earnings that were higher than expected.   Bank stocks have risen sharply so far this year, with the S&P 500 financials sector gaining nearly 20%, easily outpacing the S&P 500. 



Consumer prices were higher in March, given a boost by a strong economic recovery and year-over-year comparisons to a time when the pandemic was about to throttle the U.S. economy.  The consumer price index rose 0.6% from the previous month but 2.6% from the same period a year ago. The year-over-year gain is the highest since August 2018.  Gasoline prices were the biggest contributor to the monthly gain, surging 9.1% in March and responsible for about half the overall CPI increase. Gasoline is up 22.5% from a year ago.

 

Optimism among small-business owners in the U.S. continued to rise in March on the back of the passage of the American Rescue Plan and the easing of Covid restrictions in many states.  The NFIB Small Business Optimism Index came in at 98.2 in March, up 2.4 points from the previous month.  March posts the second straight month of increases for the index. However, it is still below the 104.5 level registered in February 2020, before the pandemic first hit the U.S.

 

Oregon’s jobless rate dropped slightly in March, according to new data out from the Oregon Employment Department, falling a tenth of a percentage point to 6.0%.  Oregon added 20,000 jobs last month. Most of the gains were in the leisure and hospitality sector as bars and restaurants steadily reopened after a broad wintertime shutdown.  The state has now regained 54% of the jobs lost in the early days of the pandemic, 153,100 altogether.



US Stocks slipped from record highs yesterday to trade marginally lower as investors await a slew or earnings reports and economic data later this week.

 

Microsoft has acquired Nuance Communications for $16 billion. The deal gives Microsoft a company that specializes in voice transcription and related artificial intelligence software. Nuance has a particular niche in health care, providing software to digitize conversations from doctor’s visits and facilitate clinical documentation.  The acquisition comes about a month after Microsoft closed a $7.5 billion deal for ZeniMax, the parent company of video game publisher Bethesda. That transaction is meant to boost Microsoft’s Xbox against growing video gaming competition. 

 

Federal spending soared in March as the government sent a third round of stimulus payments to Americans, pushing up the budget deficit to a record $1.7 trillion in the first half of the fiscal year.  The budget gap is now more than double what it was for the same period a year ago.  The deficit was $660 billion last month, 454% higher than it was in the same month a year ago.  The government’s spending surge has provided some cushion to the economy from the pandemic’s devastation, but it has also sent deficits soaring to levels not seen since the end of World War II as a proportion of the economy.

 

 

 

 



US Stocks traded at records highs again last week as the Federal Reserve reaffirmed investors the central bank’s commitment to keep loose monetary policy in place.

 

U.S. producer prices increased more than expected in March, resulting in the largest annual gain in 9-1/2 years, fitting in with expectations for higher inflation as the economy reopens amid an improved public health environment and massive government funding.  The producer price index for final demand jumped 1.0% last month after increasing 0.5% in February. In the 12 months through March, the PPI surged 4.2%. That was the biggest year-on-year rise since September 2011 and followed a 2.8% advance in February.

 

A deluge of corporate earnings results and economic data due for release this week will test investors after the stock market's latest record-setting rally.  Traders have been pricing in the likelihood of a rebound in corporate earnings to coincide with the recent batch of better-than-expected economic data. Another round of firming economic data is expected this week, with the effects of the latest round of fiscal stimulus and recent roll-back of more social distancing restrictions bolstering economic activity.



President Joe Biden will deliver his second major speech on his $2.25 trillion infrastructure plan today as he tries to raise support among Republican voters. White House aides have said they want significant progress made in Congress on the package by Memorial Day. While the recent procedural win means the administration will not have to rely on GOP support for much of that progress, Biden will have to be careful not to alienate any senators from his own party. West Virginia’s Joe Manchin has already expressed doubts on the tax measures in the plan.

 

Southeast Asia's most valuable startup is ready to go public, making its debut in the SPACsphere. Grab (GRAB) was founded as a ride-hailing company in 2012, before expanding into payments in 2016 and food delivery in 2018. It also offers loans, insurance and has been granted a digital banking license in Singapore.  The merger would be the largest between a private business and a blank check company, in a deal that will value SoftBank-backed Grab at about $35B.

 

Forget about toilet paper, hand sanitizer and semiconductors, restaurants are having trouble securing enough ketchup. With the COVID-19 pandemic turning many sit-down restaurants into takeout businesses, packet prices have risen 13% since January 2020, according to restaurant platform Plate IQ. Some stores can't even get their hands on enough of the condiment, WSJ reports, with managers using generic versions, dishing out bulk ketchup into single-serve cups or seeking secondary suppliers due to the demand.
 



With much of the market closed on Friday, investors will get their chance to react to the blow-out payrolls number this morning. Friday's report showed the jump in hiring had a broad base across industries, with leisure and hospitality leading gains. Those numbers were reflected in survey data which showed a record share of small-business owners reported job openings in March.

 

President Biden's second major legislative initiative so far looks unlikely to draw more bipartisan support than his first $1.9T COVID-19 relief package. Republicans are taking aim at the $2T infrastructure plan released last week, with Senator Roy Blunt urging the administration to significantly scale back the project if Biden wants GOP support. It may not matter. Over the weekend, Energy Secretary Jennifer Granholm said Biden is willing to push through the American Jobs Plan. He would prefer to have GOP backing, she told CNN's State of the Union, but if that does not work, he would likely support using reconciliation to allow Democrats to pass it in the Senate.

 

Stocks aren't the only market to have rallied for much of the last year. In fact, the real estate sector has seen some of the fastest house price growth in more than a decade and there aren't many communities where prices have fallen since the pandemic. Despite rising costs and mortgage rates, homes are still getting snatched off the market at a record pace, per a new Redfin report. About 59% of homes that went under contract had an accepted offer within two weeks of hitting the market, while more than 40% of homes sold above the original asking price.  U.S. home prices soared 11.2% in January, their biggest annual increase in 15 years, according to the S&P CoreLogic Case-Shiller national index. The data also "remained consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes



The S&P 500 crossed the 4,000 threshold for the first time yesterday as Wall Street built on a solid March following the rollout of President Joe Biden’s infrastructure plan.  The Stock and Bond Markets are closed today in observance of Good Friday.

 

A measure of U.S. manufacturing activity soared to its highest level in more than 37 years in March, driven by strong growth in new orders, the clearest sign yet that a much anticipated economic boom was probably underway.  The Institute for Supply Management (ISM) said on Thursday its index of national factory activity jumped to a reading of 64.7 last month from 60.8 in February. That was the highest level since December 1983.  A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy. 

 

A group of Democrats in the Oregon legislature wants their peers to look closely at who gets the largest housing subsidy in the state and consider scaling them back.  They are proposing changes to the mortgage interest deduction in order to reduce the tax break, they want to remove the deduction for second homes and for primary homes of people with an adjusted gross income of more than $250,000.  The legislature’s continued interest in cutting popular tax write-offs was enough to get the Oregon Association of Realtors to send mailers in the Portland area, urging people to reach out to their representatives and tell them they did should “protect the dream of home ownership. ”



U.S. states saw a bigger than expected drop in initial unemployment claims last week as claims fell to a fresh pandemic-era low.  Initial unemployment claims came in below 700,000 for the first time since mid-March 2020, declining more than anticipated after last week's unexpected jump.

 

The U.S. housing market is suffering from its lowest supply in history, and that is taking an increasingly hard toll on sales.  Pending home sales, a measure of signed contracts on existing homes, fell a wider-than-expected 10.6% in February compared with January, according to the National Association of Realtors. Sales were 0.5% lower year over year.  The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift, but contracts are not closing due to record-low inventory.

 

President Joe Biden wants $2 trillion to reengineer America’s infrastructure and expects the nation’s corporations to pay for it.  The president landed unveiled what would be a hard-hatted transformation of the U.S. economy as grand in scale as the New Deal or Great Society programs that shaped the 20th century.  White House officials say the spending will take place over 8 years and will be financed through higher corporate tax rates.

 



U.S. stocks fell again yesterday as major technology stocks came under pressure again after the 10-year Treasury bond yield touched its highest level since January 2020.

 

The S&P Case-Shiller 20 city home price index increased 11.2% over last year.  That year over year gain was the largest since they began keeping records nationally.  Phoenix, Seattle, and San Diego saw the largest gains.  The median price for a house in the US is now $350,000.

 

According to the Conference Board the consumer confidence index is now at 109.7, up considerably from the February reading of 90.4 and at its highest level since the onset of the pandemic in March of 2020.  Consumers' renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items.  However, concerns of inflation in the short term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead.


The Oregon Legislature is moving to wipe out more than $300 million in state taxes triggered by federal stimulus payments,  but it could take several months for 900,000 taxpayers to get all the money back.

 



U.S. stocks fluctuated on both sides of the flat line yesterday amid weakness in bank stocks caught in the downdraft of Friday’s margin call of the big hedge fund Archegos, as investors assessed the ripple effect from the forced block sells.


The CDC has extended the national ban on evictions through the end of June.  The eviction ban was scheduled to expire in two days, and advocates warned of a spike in evictions without an extension.  About 20% of adult renters said they didn’t pay last month’s rent.  This is putting a squeeze on smaller landlords, who are unable to directly access Covid rental relief funds, and some are starting to sell properties to recoup losses.  This will likely reduce the much-needed, affordable rental stock in an already unaffordable housing market.


Shares of Boeing traded higher after Southwest Airlines announced they agreed to buy 100 of Boeing’s 737 Max 7 planes as they plan to retire older jets, sticking with the manufacturer that has been the backbone of its fleet for 50 years.  Southwest, which operates an all-Boeing 737 fleet, said its order, the largest Max sale since two crashes caused a worldwide grounding in March 2019, is a vote of confidence in the planes. 


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