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Markets are building on yesterday’s big rally… risk appetite is higher as investors focus on huge central bank stimulus coupled with the easing of the pandemic, while turning a blind eye to rising U.S.-China tensions.  This morning the European Commission seems to have made a major step forward in fighting the downturn by proposing €500 billion in grants to member states hardest hit by the outbreak and a further €250 billion in loans.  Japan is also set to unveil a new stimulus package worth more than $1 trillion, its second such measure in a month. Additional stimulus in the US is still on hold, but New York City is seeking authority to borrow as much as $7 billion to make up for the revenue lost due to the pandemic. (Bloomberg)
 
U.S. ambitions to reclaim independence as a spacefaring nation will be on display this afternoon as astronauts - Douglas Hurley and Robert Behnken - are sent into space from American soil for the first time since 2011. SpaceX's Crew Dragon beat Boeing's Starliner to the finish line for today's afternoon liftoff in a chance to become the first private company to fly humans into orbit. Besides NASA's Commercial Crew program, the mission to the ISS could herald an upcoming era of space travel in which private businesses ferry humans to low-Earth orbit and beyond. (SA)
 
It’s not as if the coronavirus pandemic has gone away, but after a sharp pullback, homebuyers are now piling back into the housing market much faster than expected. Mortgage applications to purchase a home rose 9% last week from the previous week and from a year earlier, according to the Mortgage Bankers Association’s index.  It was the sixth straight week of gains and a 54% recovery since early April.
 

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



Stocks were lower yesterday as Wall Street digested a strong rally this week along with the latest weekly jobless claims data and rising tensions between China and the U.S.
 
The Labor Department reported another 2.4 million people filed for unemployment benefits last week.  This report brings the total number of filings during the pandemic to more than 38 million. The number of continuing claims was at 25.07 million, its highest level on record.
 
Sales of previously-owned homes slid nearly 18% in April as the pandemic upended the U.S. real estate market.  Existing-home sales occurred at a seasonally-adjusted annual pace of 4.33 million, according to the National Association of Realtors.  It was the lowest level for sales since July 2010.  Compared with last year, sales were down 17% in April.
Maybe we are seeing some green shoots.  U.S. private sector firms reported a slightly slower rate of contraction in activity in May.  The manufacturing purchasing index rose to 39.8 in May from 36.1 in April. Meanwhile the services managers index rose in May to 36.9 from 26.7.  Any reading below 50 indicates worsening conditions.  At least the numbers are headed in the right direction.
 
With Northwest Quadrant Wealth Management, I?m Tyler Simones.



Stocks were solidly higher yesterday adding to gains for the week with Facebook and Amazon leading the gains hitting fresh all-time-highs.
 
Shares of Lowes and Target both traded higher after both retailers reported better-than-expected profit and sales, with Target reporting digital sales rising 141%.
 
The Senate passed legislation that could ban many Chinese companies from listing shares on U.S. exchanges or raising money from American investors without adhering to Washington’s regulatory and audit standards.  The bill, would require companies to certify that “they are not owned or controlled by a foreign government.” Alibaba, an e-commerce giant based in China, saw its U.S.-listed shares fall more than 2% on the news.
 
State economists are predicting Oregon’s economy is heading into its steepest downturn since the Great Depression. They expect it will take several years for Oregon to return to the health it enjoyed before the outbreak hit.  Economists estimate the state will lose $10.5 billion in lost revenue over the next five years, a massive budget hit that will trigger sharp cuts in Oregon’s spending on schools, health care, law enforcement and other social services.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.
 
 
 



Two large Dow Jones components reported fiscal first-quarter results with Walmart the big gainer, while Home Depot was the biggest drag. Walmart's stock surged 4.1% to pace the Dow's gainers after the discount retail giant reported better than expected profit, revenue, and same store sales. Home Depot shares fell 1.3% to pace the Dow's losers after missing on profit but beating on revenue and same store sales. 

 
Housing starts occurred at an 891,000 seasonally adjusted annual rate in April, representing a 30% drop from March. It was the slowest pace of new home construction since February 2015. Permitting activity for newly-built homes fell 20.8% between March and April to a seasonally adjusted annual rate of 1.07 million.
 
For the first time in weeks, Americans are booking more flights than they're canceling, and US airlines are adding flights to their schedules.  Southwest, Delta and United Airlines all said they are pulling back on the deep cuts in their current schedules because of improved bookings.  It's only a modest improvement, but any good news is welcome in the airline industry, which needed a $25 billion bailout to keep operating. After weeks of essentially zero demand for US air travel, even a small improvement in passenger demand, bookings, and trip cancellations is a step in the right direction.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



Stocks rebounded yesterday from losses last week as news from a Moderna vaccine trial sparked optimism about a potential virus vaccine.

 

 Confidence among home builders has recovered somewhat after last month’s record-breaking decline even as much of the country remains under stay-at-home orders because of the coronavirus.  The National Association of Home Builders’ monthly confidence index rose seven points to 37 in May. April’s figure had represented the lowest index reading since June 2012.

 

Fewer Americans are calling their mortgage servicers to ask for relief from mortgage payments, but the housing industry isn’t out of the woods yet.  More than 4.1 million homeowners are in forbearance plans now, which means 8.16% of all mortgages were in forbearance as of May 10, allowing borrowers to either skip or make reduced payments.  While mortgage servicers are still facing stress because of the record deluge of requests for payment relief, signs suggest that homeowners’ prospects have improved as parts of the country have begun to emerge.

 

San Francisco-based Square said they would let people work remotely, even after regional shelter-in-place orders end. The news came a week after Twitter announced their employees could permanently work from home.

 

With Northwest Quadrant Wealth Management, I’m Tyler Simones.



This week Investors will be focused on a slew off retail companies reporting earnings and what the Fed has to say in front of Congress.    

                                                          

U.S. retail sales tumbled by a record 16.4% from March to April as business shutdowns have kept shoppers away and threatened the viability of stores across the country.  The Commerce Department’s report showed a sector that has collapsed so fast that sales over the past 12 months are down a crippling 21.6%. The severity of the decline is unrivaled for retail figures. The monthly decline in April nearly doubled the previous record drop of 8.3% — set just one month earlier.                                                                                                              


JCPenney filed for bankruptcy on Friday, the latest retail giant to see its downfall hastened by the crisis. The pandemic was the final blow to a 118-year-old company struggling to overcome a decade of bad decisions, executive instability and damaging market trends.  The company said it has an agreement with most of its lenders on the turnaround plan that will allow it to stay in business as a more financially healthy company, but will include closing an as yet unannounced number of its 846 stores. As part of the turnaround process JCPenney arranged to borrow an additional $450 million from those lenders to pay for operations during the reorganization.

 

With Northwest Quadrant Wealth Management, I’m Tyler Simones.



As the U.S. tries to wrestle global supply chains back from China, Taiwan Semiconductor, a major supplier to Apple and Qualcomm, has confirmed plans to build a $12B chip factory in Arizona. The plant, which would create over 1,600 jobs, will produce the most sophisticated 5-nanometer chips that can be used in high-end defense and communications devices. The administration is also in talks with Intel about new foundries. While the company has major domestic manufacturing operations, it supplies only its own chips rather than making them for outside customers. (SA)

 

While final negotiations with lenders could still spill into the weekend, J.C. Penney is planning to file for bankruptcy within the next 24 hours.. The retailer has been in discussions with its first-lien lenders for a $450M loan to finance the bankruptcy and would require the achievement of certain goals to receive the second half of it. Restructuring plans include closing 180-200 out of the 846 J.C. Penney department stores that were active as of February. (CNBC)

 

Consumer spending tumbled a record 16.4% in April as the backbone of the U.S. economy retrenched amid the coronavirus pandemic, according to data released this morning.  Economists surveyed by Dow Jones expected the advanced retail sales number to fall 12.3% after March's reported 8.3% dive already had set a record for data going back to 1992. The March numbers were revised to be not as bad as the 8.7% initially reported.  Some 68% of the nation's $21.5 trillion economy comes from personal consumption expenditures, which tumbled 7.6% in the first quarter just as social distancing measures aimed at containing the coronavirus began to take effect. (WSJ)

 

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



In normal times, weekly initial jobless claims falling to the lowest level in almost two months. Time -- would sound like a good thing. But with almost another 3 million claims, we remain far away from normal times. We’ve now eclipsed 36m unemployment claims. Goldman Sachs Group Inc. now sees unemployment in the U.S. peaking at 25%, with a slow reversal meaning the rate will hold near 10% by the end of the year. The overhang of unemployed workers seems set to be one of the main risks to an economic rebound, with signs it is already slowing the recovery in China. (Bloomberg)
 
The Freddie Mac COVID-19 Payment Deferral solution returns a homeowner's monthly mortgage payments to their pre-COVID amount by adding up to 12 months of missed payments, including escrow advances, to the end of the mortgage terms without accruing any additional interest or late fees. This will help borrowers keep their mortgage payment current following their hardship when other options - such as reinstatement, or a repayment plan - are not viable. Fannie Mae also unveiled a COVID-19 payment deferral option that allows homeowners in forbearance due to the pandemic to shift their missed payments to the end of the loan term. (SA)
 
There was a little good news for the oil market in this morning's International Energy Agency report which said that the outlook had "improved somewhat." Supplies are falling faster than previously expected, with OPEC and its partners slashing output while others like the U.S are forced to scale back drilling. A barrel of Brent for Julu delivery is trading over $30 this morning.  (FT)
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.



The President opened a new front in his diplomatic war with China, ordering the main pension plan for US federal government employees not to invest its portfolio in Chinese companies.  The intervention comes as the Federal Retirement Thrift Investment Board, which manages almost $600bn for some 5.5m federal employees, prepares to shift the international component of the fund into an index that includes Chinese stocks.  The Trump administration argues that the MSCI All Country World ex-US Investable Market index includes companies that pose a serious national security risk.  (FT)

 

Big advertisers like General Motors, PepsiCo, and General Mills are seeking to take advantage of options that became available May 1 to cancel up to 50% of third-quarter TV spending.  That doesn't bode well for owners of broadcast and cable networks, from Comcast and NBCUniversal to ViacomCBS and Walt Disney. Where's the money going? Much of it will likely be aimed at shoring up the firm's balance sheets, while some is shifting to areas like digital video and e-commerce. (SA)

 

Shares of Grubhub and Uber are both higher following reports of a merger. A deal would give Uber Eats' money-losing restaurant delivery service a leg up on market leader DoorDash at a time when the coronavirus pandemic has upended Uber's core business of ride-hailing. The two companies are still haggling over the deal's stock exchange ratio, though some say the tie-up could be finalized this month. (CNBC)

 

In economic data, the US Producer Price Index fell 1.3%, significantly below expectations.

 

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



The central bank's Secondary Market Corporate Credit Facility will begin purchases today of eligible exchange-traded funds invested in corporate debt, seeing the method as a fast way to direct money into the credit markets. It's a historic milestone for the Fed, which hasn't yet bought any ETFs. The program, managed by BlackRock centers around investment grade corporate bonds, though some purchases will be in high-yield. Another Fed facility designed to buy debt directly from issuers is set to launch "in the near future." (SA)
 
The Department of the Interior has given final approval for Berkshire Hathaway's $1B solar project in Nevada that could power 260K households, enough to cover the entire residential population of Las Vegas. When finished, the 690 MW Gemini Solar Project would become the world's eighth largest solar power facility in the world, spanning some 7,100 acres of federal land. The developers aim to build the project in two phases over 28 months, with the first portion coming online in early 2021 and final facility completion as early as 2022. (CNBC)
 
Demand is slowing for the US government’s $660bn small-business rescue program, reflecting fears among some enterprises that they cannot meet its requirements for loan forgiveness.  Businesses rushed to apply for money when the second round of the loan scheme opened last month, with $90bn being allocated in the first three days. Demand was so high the scheme’s website crashed on the first day.  But, demand has slowed since then, with only just over $100bn having been claimed in the subsequent 11 days, leaving over $122bn in the pot. (FT)
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.



Thousands of visitors streamed into Shanghai Disneyland on Monday for the first time in three months as the Chinese park became the first reopened by Walt Disney after the coronavirus pandemic brought the Magic Kingdom to a standstill.  While Mickey Mouse joined familiar Disney characters welcoming the crowds, the Shanghai experience will not be as it was: Instead of parades and fireworks, there are mandatory masks, temperature screenings, and social distancing for visitors and employees.  Disney’s $5.5 billion China flagship is the first of its six resorts around the world to reopen after the pandemic (CNBC)

 

As concerns grow about reliance on Asia as a source of critical technology, the administration is meeting with semiconductor companies looking to develop chip factories in the U.S., WSJ reports. Officials are discussing new foundries with Intel and Taiwan Semiconductor, and are interested in helping Samsung Electronics expand operations. "This is more important than ever, given the uncertainty created by the current geopolitical environment," Intel CEO Bob Swan wrote in a letter to the U.S. Department of Defense. (SA)

 

Under Armour this morning reported a sales decline of 23% during its first quarter as its business took a blow from the coronavirus pandemic and its stores were forced shut, freezing its turnaround plans. The athletic apparel company said it plans to cut about operating costs in 2020 to help it weather the crisis, including by temporarily laying off some retail employees.  For the quarter, Under Armour reported a net loss of $589.7 million.

 

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



US stocks were higher yesterday with the NASDAQ higher for the fourth straight day.  The NASDAQ is now positive on the year after suffering steep losses in March.

 

The US Economy Lost 20.5 million in April and the unemployment rate rose to 14.7%, both post-World War II records.  Economists had been expecting a loss of 21.5 million jobs and the unemployment rate to surge to 16%.  The “real” unemployment rate, which includes workers not looking for jobs and the underemployed, surged to 22.8%.


Shares of Uber are sharply lower after the company announced a quarterly loss of nearly $3 billion, including a write-down of more than $2 billion related to its investments in Asian partners.  The only bright spot in the company’s earnings report was the growth they saw in their Uber eats division.


The 112-year-old storied luxury department store chain Neiman Marcus has filed for Chapter 11 bankruptcy protection, the first department store chain to do so and the second major retailer to be toppled by the coronavirus pandemic.  This follows the bankruptcy filing by J Crew on Monday. Experts believe there will be more to come even as there are moves to reopen businesses in parts of the country like Texas and Florida.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones



US Stocks fell for the first time in three days yesterday as investors weighed the prospects of reopening the economy along with a dismal report on U.S. payrolls.

 

Shares of Peloton shot higher after the company reported revenue surged 66% during the third quarter, as more people purchased its fitness equipment and tuned into its live classes, to try to break a sweat while stuck at home.


Nordstrom plans to permanently close 16 of its 116 full-line stores while moving toward a phased reopening of others, as they tailor their immediate future to the realities of retail in a pandemic.  The Seattle-based company also said it will make changes to how their stores function in a “market-by-market” approach and will move its big Anniversary Sale from July to August.
 
The Oregon Department of Revenue said that emergency stimulus loans going to small businesses throughout the state will not be taxable as commercial activity under Oregon’s controversial new business tax that supports education.  Originally the OR dept of Revenue said the forgiven loans would be subject to the commercial activity tax.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones



Stocks rose yesterday as investors bet the U.S. economy could start to reopen soon, while oil prices jumped for a fifth straight day.

 

 The Institute for Supply Management’s survey of non-manufacturing companies plummeted to 41 in April from 52% in March, breaking a string of 112 straight months of positive readings.  Any number over 50% is considered a sign of growth; readings below 50% signal contraction or even recession.  The massive losses suffered by retailers, restaurants, hotels, airlines and other service-oriented companies caused the key economic bellwether to plunge to the lowest level since the 2007-2009 Great Recession.

 

Walt Disney’s profit dove more than 90% in the second quarter, an example of the drastic effects on the company from the pandemic, which executives said cost the media giant more than $1 billion in sales just in its theme-parks division.

 

Shares of Norwegian Cruise Line took a dive, after the cruise operator issued a “going concern” warning.  Norwegian’s warning also weighed heavily on the stocks of rivals Carnival and Royal Caribbean Cruises.  The stocks’ selloffs come despite Norwegian also announcing a series of financial transactions that if completed would provide enough liquidity to fund operations even if its cruises remain suspended for over 12 months.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones



US Stocks rose slightly yesterday as an advance in the biggest U.S. technology stocks lifted the market into the green from losses earlier in the session.


Massive stimulus to support the U.S. economy through the coronavirus crisis will cause the Treasury to borrow a record $3 trillion this quarter.  On top of that borrowing, Treasury also said it anticipates another $677 billion in the third quarter. 


J. Crew and Golds Gym filed for bankruptcy protection yesterday with plans to hand over control to their lenders, adding to a list of companies being pushed to the brink by widespread store closures.


The Federal Reserve said it would start buying corporate bond exchange-traded funds starting this week, as it offered up further details on its planned purchases of debt from U.S. businesses. Soon after, the central bank will start purchasing debt issued by companies directly, and from the market. The Fed also said it could buy an entire sale of corporate bonds by itself.
 
The restaurant purge is already upon us. Over the past two months 5% of Oregon restaurants have permanently closed, according to a survey from the National Restaurant Association. That number could climb to 10% by the end of May.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones



US Stocks were lower last week after Wall Street analysts realized first-quarter corporate earnings would be bad this year because of the pandemic, but they’ve been even worse than expected as companies are beating forecasts by the lowest rate in at least 10 years.

 

Mortgage rates have dipped to a record low for the second time in as many months.   The 30-year fixed-rate mortgage dropped to an average of 3.23% during the week ending April 30, a decrease of 10 basis points from the previous week. This represents the lowest level since Freddie Mac began tracking this data starting in 1971. A year ago, the 30-year fixed-rate mortgage averaged 4.14%.

 

So far, 3.5 million mortgage borrowers have requested forbearance, representing nearly 7% of all mortgages nationwide.  That means millions of homeowners can now skip or make reduced monthly payments on the home loan for up to one year.  Eventually, borrowers will need to work out a repayment plan with their lender.  And borrowers need to be careful that they don’t agree to a repayment plan they cannot afford.

 

Billionaire investor Warren Buffett made a lot of news at Berkshire Hathaway’s first virtual annual meeting on Saturday, including revealing that he sold all his airline stocks and didn’t see any value in any major acquisitions amid the coronavirus pullback in stocks.

 

With Northwest Quadrant Wealth Management, I’m Tyler Simones.



Amazon reported its first-quarter earnings after the bell yesterday, revealing the pandemic’s impact on the business that has been a rare bright spot on the stock market. The stock fell about 5% after hours after missing estimates on earnings while generating just over $75bn in revenue during the quarter.  “If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” Amazon said in the press release. “Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances.” (CNBC)

 

Boeing has said it doesn’t plan to seek federal aid after raising a whopping $25 billion in a bond offering, the company’s biggest debt sale ever, as it faces what it expects to be a multi-year slump in air travel.  Boeing has scrambled to shore up liquidity and recently drew down a nearly $14 billion loan.  The seven-part offering, which includes bonds that won’t be redeemed until 2060, was oversubscribed and attracted better pricing than might have been expected for a company with Boeing’s credit rating and challenges.  (WSJ)

 

Apple Inc. AAPL 2.11% reported a slight uptick in revenue for its latest quarter even as the coronavirus shut down factories and dented sales in China, as the tech giant’s growing services business offset declining iPhone sales.  The company said revenue rose 1% in its fiscal second quarter to $58.3 billion, with iPhone sales momentum stalling after Apple closed stores, first in China and then world-wide. Profit fell about 3% to $11.25 billion.  In the face of historic economic uncertainty, Apple declined to project sales for its current quarter for the first time since it began providing concrete revenue guidance in late 2003. (FT)

 

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



Yesterday’s advance put the S&P 500 up more than 13% for April, the index's biggest monthly increase since 1974.  Optimism was driven by positive results from Gilead's remdesivir trial, which could help speed recovery from COVID-19, as well as strong earnings from Microsoft and Facebook that put the Nasdaq Composite on track to erase losses for the year. The Fed further pledged to use "its full range of tools to support the U.S. economy in this challenging time" and the news was enough to override data showing the U.S. economy had logged its worst quarterly performance since 2009. (SA)

 

McDonald’s reported first-quarter earnings this morning that fell 17% as the coronavirus pandemic led to restaurant closures and plunging sales.  Net sales dropped 6% to $4.71 billion as the company observed “dramatic changes in consumer behavior”.  The company’s international developmental licensed markets business, which includes Brazil and Japan, is faring better, with 80% of locations operating. About 99% of Chinese restaurants have reopened, but the company said demand is down because consumers have not fully resumed their routines prior to the crisis. (CNBC)

 

Microsoft Corp. outperformed the financial expectations that it faced even before the coronavirus pandemic in an earnings report after the bell yesterday. The company reported fiscal third-quarter earnings of $10.75 billion on sales of $35 billion (FT).


Finally, US weekly jobless claims are out, this week’s claims hit 3.84 million, topping 30 million over the last 6 weeks.

 

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



With all eyes on an advertising industry slump, Alphabet posted strong Q1 figures even as it noted a March slowdown. Many big travel booking names have been cutting their multibillion-dollar ad budgets by 50%-80%, and Alphabet revenues are still dominated by advertising (99% of Alphabet revenues from Google, and 84% of that from ads). But in Q1, the company grew revenues 13% and operating income 19%, lifted by a strong first two months before a March drop-off alongside widespread business shutdowns. YouTube ad revenue rose 33.5% year over year.  (SA)

 

Boeing posted a first-quarter loss of $641 million and said it burned through $4.3 billion in cash during the first quarter as the company faces both coronavirus and the more than yearlong grounding of its best-selling plane, the 737 Max.  Before the market opened on Wednesday, the company said it is planning to reduce production of some aircraft, including the 787 Dreamliner, and to cut payroll by about 10% through voluntary measures “involuntary layoffs as necessary.”  Revenue plunged 26% from a year earlier to $16.91 billion and the company.  (CNBC)

 

The first read on US GDP is out… US first-quarter GDP shrank 4.8%, vs 3.5% decline expected.  All eyes will be on the Fed’s monetary policy decision due at 2 p.m. ET Wednesday. Investors will look to the central bank’s statement and chairman Jerome Powell’s virtual press conference for clues about how long interest rates will stay near zero as the economy seeks to emerge from coronavirus crisis.

 

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



Detroit automakers have targeted May 18 for a restart of some production at U.S. car factories, WSJ reports. Representatives from General Motors, Ford Motor, and Fiat Chrysler agreed on the timeline following talks with Governor Gretchen Whitmer's office and the United Auto Workers union, which warned last week that it was "too soon and too risky" to reopen plants in early May. While terms haven't been finalized, the companies are working with the union on drawing up safety protocols. (WSJ)

 

PepsiCo on Tuesday reported its first-quarter adjusted earnings rose 10% as consumers stocked up on its drinks and snacks to prepare to spend more time at home.  The company reported organic revenue growth of 7.9% as net sales rose to just under $14bn.  Pepsi also said Tuesday that it has closed its acquisition of Rockstar Energy, freeing up the company to make distribution deals with other energy drink makers. The company said that it has signed an exclusive U.S. distribution deal with Vital Pharmaceuticals, which makes the fast-growing Bang performance energy drinks. (CNBC)

 

Caterpillar experienced a sales drop of 21% in the first quarter as the coronavirus pandemic disrupted demand in the construction and mining sectors.  The industrial giant on Tuesday reported revenues of $10.6 billion in the first quarter, compared with $13.5 billion in the first quarter of 2019.  The heavy equipment maker said about 75% of the company’s primary production facilities continue to operate amid the pandemic, while some facilities that were temporarily closed have reopened. (FT)

 

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



The purchasing managers index for the service sector fell to a record low in April, while the manufacturing Index weakened to the lowest level in 11 years, as business activity has slumped.  The Purchasing managers index fell to 27 from 39 in March while the manufacturing Index dropped to 36 from 48.  Any reading below 50 indicates worsening conditions.

 

Intel reported earnings and revenue that spiked well above expectations in the first quarter but predicted that profit would come in lower than projections in the second quarter, sending shares lower.  Intel reported first-quarter net income of $5.7 billion, or $1.31 a share, compared with $3.97 billion, or 87 cents a share, in the year-ago period.

 

Another 37,000 Oregonians filed new jobless claims last week, bringing total job losses over the five weeks of the coronavirus outbreak to 334,000. That’s 17% of the state’s workforce, one in six Oregon jobs altogether.

 

And one of the mis intended consequences of the unemployment benefit in the CARES ACT is that it is encouraging people to stay unemployed because they are making more on unemployment than they are at their jobs.  The enhanced unemployment benefits run through the end of July.

 

With Northwest Quadrant Wealth Management, I’m Tyler Simones
 



Stocks rose for the first time in three days yesterday as crude prices stabilized after a record plunge while better-than-expected earnings also lifted market sentiment. 


In an April survey of the National Association of Realtors, 90% of their members said buyer interest has declined since the pandemic.  Also, 59% said buyers are delaying home purchases for a couple of months and 57% said sellers are delaying home sales for a couple of months.  Homes that are on the market are often just sitting there. According to Zillow the inventory of listed homes is up about 2.5% overall since March 1.


Chipotle Mexican Grill said their sales rose 8% in the first quarter, thanks in large part to a surge in online sales that accounted for more than a quarter of the three-month revenue. Shares jumped 12%

.
The pandemic has already pushed demand for some more costly consumer products off a cliff. AT&T posted its lowest-ever postpaid smartphone upgrade rate in the first quarter in what could be a distressing sign for smartphone manufacturers.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones



Stocks fell sharply for a second day yesterday, taking a cue from a further slide in oil futures.


Shares of Netflix are higher after the streaming pioneer revealed that it added more than double the new subscribers it expected amid the spread of COVID-19.  The company reported the addition of 15.77 million paid subscribers globally in the first quarter. Netflix’s biggest quarter for paid net additions to its subscriber total previously was 9.6 million in the year-ago quarter.  Netflix reported first-quarter earnings of $709 million, or $1.57 a share, compared with $344 million, or 76 cents a share, in the year-ago period.


Sales of previously owned U.S. homes sank 8.5% in March just as large parts of the economy shut down which threw the real estate market into disarray.  Existing home sales dropped to an annual pace of 5.27 million and the decline is likely to be a lot sharper in April.


Senate Republicans and Democrats reached a deal on another $484 billion coronavirus relief package for small businesses, hospitals and testing.  The deal would allocate $320 billion more for the Paycheck Protection Program, which provides small business loans, and the rest would go towards hospitals and testing.

 

With Northwest Quadrant Wealth Management, I’m Tyler Simones



U.S. stocks sold off yesterday as investors watched oil prices crash, overshadowing optimism about plans for a staggered easing of global lockdowns.

 

The May contract for U.S. West Texas intermediate crude oil, which expires today, erased all value and dropped below zero for the first time in history, settling at -$37.63 per barrel. The June contract for the commodity also sank sharply but held above $20 per barrel.


The Senate did not reach a deal on the next relief bill in time for a brief Monday session, but set up a vote as soon as this afternoon to replenish a key small business aid program.  On Sunday, negotiators signaled they had come closer to a deal that could include $370 billion in loan programs for small businesses, designed to keep employees on the payroll as businesses across the country shutter. It may also include $75 billion for hospitals and $25 billion for testing — but not money for state and local governments that Democrats sought, as of now.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones
 



The American government has committed more than $6T to arrest the economic downturn from the COVID-19 pandemic, with $2.35T in fiscal spending and $4T from the Federal Reserve. The figure represents more than a quarter of U.S. economic output, and will mean for the first time since WWII, the nation will owe more than its economy produces in a year. Despite the huge congressional stimulus, proportionate to GDP, it is the world's 10th largest, behind Japan, Singapore and the Netherlands. (FT)

 

Protection measures against the coronavirus continued to tear through the employment ranks, with 5.245 million more Americans filing first-time claims for unemployment insurance last week, the Labor Department reported this morning.  The new filings bring the crisis total to just over 22 million, nearly wiping out all the job gains since the Great Recession. Though the most recent total, for the week ended April 11, represented a drop from the previous two weeks, it still showed that the damage to the U.S. labor market remains profound. The numbers of late have been bolstered by measures taken to allow more workers to file claims. They now include independent contractors and others who previously were not eligible for benefits. (CNBC)

 

BlackRock, the world's largest asset manager, said assets under management dropped in the first quarter by the most on record as its clients' portfolios were slammed by the turmoil in global markets caused by coronavirus. The group's assets tumbled to $6.5tn from a record high of $7.4tn at the end of 2019. The company still garnered $35bn in inflows over the period, although a significant portion came from an influx of cash as investors moved to the safest types of assets. (WSJ)

 

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


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