Today marks the 138th anniversary of the Battle of the Little Bighorn and the death of General Custer. Yesterday felt a little like that as markets made a strong downward move as traders grew weary of bad news from Iraq.
US consumer confidence for June hit its highest level since January of 2008. Consumers are very positive about the short-term improving economy, but are somewhat tepid about income expectations. Overall, a bullish number. (Associated Press)
New home sales posted an annual rate of 504,000 in May. That is up 19% from the prior month and is the best number since 2008 as we slid into the abyss. The median US home price for a new home stands at $282,000. (Reuters)
The makers of Lucky Charms, Betty Crocker and GoGurt, General Mills, saw year-over-year profits rise over 10% last quarter as the company continues to drive down costs. Sales declined almost 3% to $4.41 billion during the period. (Reuters)
Gun manufacturer Smith & Wesson is down almost 14% over the last four trading days as they say sales will fall in future quarters. They say the surge of new buyers spurred over the last 18 months by fear of new regulation has passed. Net sales for the company are down about 5% this year. (Fox Business News)
Market volatility is at very low levels, by absolute and historical standards, as the SP 500 posted its 22nd record high of the year on Friday. (CNBC)
China’s manufacturing activity expanded for the first time in 6 months in June showing the world’s second largest economy may be stabilizing. The report showed broad across the board improvement in almost every sector. (Associated Press)
While the economy has recovered all the jobs lost during the great recession the quality of those jobs is suspect. For example high paying construction and manufacturing jobs made up 15.3% of all jobs at the end of 2007 and now are just 13%. Of the 8 million jobs regained since the recession only 3 million are jobs paying above the national average of $24.38 per hour. (Market Watch)
The number of federal workers under the age of 30 hit and eight year low of 7% in 2013 versus 25% for the private sector. Back in 1975 20% of the federal work force was under 30. At the end of 2013, 45% of federal employees were older than 50 years. (Wall Street Journal)
Stock repurchases soared more than 60% in the first quarter of the year. Companies spent $159.3 billion buying back stock during the period. Much of that buying is being done with borrowed money at very low rates of interest. (Fox Business News)
Yesterday the S&P 500 notched its 21st record high of 2014 (Market Watch). Want to find out if that is something to worry about? Check out Financial Focus Radio this weekend and we will tell you. Today is quadruple witching options Friday, which is likely increase trading volume and volatility.
Oracle increased sales by 3.4% to $11.32 billion in the latest quarter. However profits were down as costs increased 7.8%. The company made $3.65 billion down from the same time last year. (Fox Business News)
Fresh off their IPO of earlier this quarter, northwest based Papa Murphy is being sued by two sets of franchisees who say the company mislead them in financial statements. The financial website Seeking Alpha says 31% of all Papa Murphy franchisees are currently losing money. (Oregon Live)
In 2013 Gross Domestic Product for Oregon was up by 2.7%. Not bad. North Dakota GDP grew by a leading 9.7%. Alaska was the only state to decline, down 2.5%.(Wall Street Journal)
An electric HOG??? Yep Harley-Davidson is unveiling an electric motorcycle. But don’t expect the thunder to go away anytime soon. The new bike has a limited range of 130 miles or 30 to 60 minutes. No price tag announced. (Associated Press)
The S&P 500 closed at a record high yesterday after the Federal Reserve hinted at a slightly faster pace of interest rate increases starting next year because the Fed officials see the economy continuing to recover.
Amazon unveiled its long-anticipated smart phone yesterday. The companies CEO Jeff Bezos showed off the new Fire phone with 3D visual technology. The Fire phone will have a 4.7 inch screen and a 13 megapixel camera. My take is that this will be a flop like the Facebook and Google phones. Remember those? Shares of Amazon still traded higher on the unveiling.(marketwatch.com)
US jobless claims fell 6,000 last week to 312,000, which is a 7 year low and should go a long way in lowering the unemployment rate.(CNBC)
Shares of the supermarket chain Kroger rose 6% this morning after the company reported much better than expected profit and sales in the 1st quarter. The company also raised their full year earnings guidance.(marketwatch.com)
As is things haven't been bad enough for General Motors, GM was hit yesterday with a $10 Billion class action lawsuit. The suit says that GM should compensate millions of car and truck owners for lost resale value after the company had to recall 20 million cars this year. The lawsuit paints a disturbing picture of GM's approach to safety over the years. Shares of GM traded lower on the news.(yahoo finance)
US Stocks ended slightly higher yesterday for the 3rd straight day as investors shrugged off mildly disappointing economic reports on inflation and the housing market.
FedEx's shares rose 4% this morning after the shipping company on Wednesday said its fiscal fourth-quarter profit rose to $730 million, or $2.46 a share, from $679 million, or $2.13 a share, a year earlier. Revenue ticked higher to $11.8 billion from $11.4 billion which was better than Wall St expected.(yahoo finance)
US Consumer prices recorded their largest increase in more than a year last month as costs for a range of goods and services rose easing the Federal Reserve's concern that inflation was running too low.(marketwatch.com)
AT&T will be the exclusive carrier for the new Amazon smartphone set to be announced today. The Amazon phone will reportedly have a three dimensional display. Shares of both companies rose on that news.(marketwatch.com)
The State of Oregon employment department reported Oregon's unemployment rate ticked up from 6.8% to 6.9% last month. The rise in the unemployment rate came despite the Oregon economy adding 4,200 jobs in May. The increase happened because more people ended the labor market.(Portland business journal)
Stocks had their worst week in 2 months last week as investors turned cautious after violence in Iraq sent oil prices soaring.
US Medical device maker Medtronic is planning to merge with Covidien in a $40+ Billion deal. The merger will move Medtronic's headquarters to Ireland where Covidien is based in order to sharply lower their corporate taxes. Pfizer recently did a similar deal with the European based Astrazeneca to lower their tax rate. The American medical-device industry is moving out of this country in response to Obamacare which has a provision to tax medical-device makers at a higher rate to help pay for Obamacare. I doubt this is the last deal like this we will see.(marketwatch.com)
The International Monetary Fund just cut its growth estimate for the U.S. to 2% for 2014, down from the 2.8% it projected in April. The IMF still expects 3% growth in 2015. Though there is a "meaningful" rebound happening, the IMF said it won't be enough to offset the first quarter that was hit by a harsh winter.(yahoo finance)
14 Companies are scheduled to go public this week and 124 companies have gone public in 2014 which is up 57% from the same period last year. Some investors, including this one, see too much froth in the IPO market, especially with the valuations some of these companies are commanding. Investors Beware! (marketwatch.com)
Today’s question is will this Friday the 13th be scary for the markets as Iraq melts down and the S&P 500 has its first three day losing streak in a couple weeks?
Oregon’s largest private sector employer, Intel, raised its sales outlook for the second quarter and full year as they say the PC market is stronger than expected. The company had projected their third year of flat sales before this revision. (Reuters)
US business inventories had their biggest gains in six months in April, up 0.6%. Businesses are rebuilding their inventories for shoppers after production disruptions during the hard winter. At April’s sales pace it would take 1.29 months for businesses to clear the shelves. (Reuters)
Import prices are showing little inflationary pressure rising just 0.1% in May and falling 0.5% in April. Sluggish global demand and slack in the domestic labor supply are keeping inflation muted. (Reuters)
Producer prices fell 0.2% in May and have inflation at the manufacturing level running at an annualized 2.0%. This is a very tame number. (Bloomberg)
Markets saw their largest down day in 3 weeks yesterday as the recent melt up took a day off. The S&P 500 has gone 39 trading days without a 1% daily change, the second longest streak in 15 years. (WSJ)
The international Monetary Fund published data yesterday showing home prices are well above their averages in many countries. Australia, Belgium, Canada, Norway and Sweden were singled out as countries of concern. For our neighbor to the north, Canada, house prices are 33% above average as compared to income and 87% above comparable rental rates.
For May US retail sales were up 0.3% and take out autos and gas the number is flat. That number is much weaker than expected. (Reuters)
A report by Cisco says traffic on the web will more than double in five years with most of it being used for online video. Currently 78% of all band width is used for video. That number will grow to 84% in five years. Currently 64% of all internet traffic is over Wi-Fi networks.
With low interest rates, Men’s Warehouse is borrowing $600 million to finance its takeover of Jos. A Banks. In their first bond offering since 2004 the company sold 7 and 8 year notes for just a little over 2%. (Bloomberg)
Markets were essentially flat yesterday as we had little news to move the markets.
In a good sign for future growth companies are building inventories. US Wholesale Inventories rose 1.1% for the second straight month in April. (Wall Street Journal)
There were 4.5 million open jobs in the US at the end of April, 300,000 more than the month before. Retail trade, arts, entertainment and recreation posted the strongest growth. (Reuters)
Could it be the death throes? Radio Shack posted a $98.3 million loss last quarter; more than triple what we saw the preceding quarter, as sales slid for the 9th straight quarter. Radio Shack shares were down 22% in Tuesday’s trading. (Associated Press)
Consumer credit continued to climb to new record highs in April. Student loans and auto financing fueled nonrevolving credit growth to an annual rate of 9.5%, the fastest growth since February 2013. Credit card debt grew by a 12.5% annual rate, the fastest since February 2001. (Market Watch)
Markets continued their slow upward melt yesterday again posting slightly higher record closes. Very little economic data today so there may be little to move markets. (Fox Business News)
Small business owners were more upbeat in May about the US economy than at any time since September 2007. Even while reaching a post-recession high, the index is still far below what we would expect in a robust economic expansion. This was the third straight up monthly posting for the index. (CNBC)
Home foreclosures reached 8 year lows in May dropping 26% from last year. Currently nationally 109,824 homes are in some stage of foreclosure. Florida leads the pack with one in every 436 homes in foreclosure. (Reuters)
The world added 2.6 million millionaire households in 2013, up 19 percent. Millionaires represent 1.1% of the entire world population. The US has almost 44% of the world’s millionaires. Last year total global wealth rose 14.6% to $152 trillion. (Boston Consulting Group Global Wealth Report)
Short sellers, those betting the stock market will go down, have been wrong for five years. Short sellers have recently raised their bets to 11% of all shares of one index that tracks the S&P 500, their highest since 2012. Bets against tech stocks are 67% above their 12-month rolling average. (Bloomberg)
Markets stand at record highs as we start trading this morning. The Dow Jones is just 100 points from 17,000 and the S&P 500 is just 50 points from the 2000 level. (CNBC)
The food fight is over and Tyson Foods is buying Hillshire Foods for nearly $1 billion more than rival Pilgrim’s Pride was willing to pay. The total price tag is $7.7 billion. That is a 70% premium to Hillshire’s share price when bidding began. (Market Watch)
Coffee prices are on the rise. Kraft Foods, the makers of Maxwell House and Yuban, are following the lead of JM Smucker, makers of Folgers and Dunkin’ Donuts, and raising prices about 9%. That is the first price increase in three years. The prices of Arabica-coffee beans are up 55% this year. (Wall Street Journal)
The size of new homes in this country grew by 4% to a record of almost 2500 square feet. The largest average home is 2534 sq ft in the South and the smallest is 2394 sq ft in the West. Last year 9% of all new homes sold were in excess of 4000 sq ft, up from 5% just a decade ago. (Market Watch)
The American Banker’s Association says lending to businesses will grow by 9% this year. Banks say they are seeing increased interest by businesses for loans as they prepare to expand plants and add new equipment.
US Stocks climbed to yet another record high yesterday, the 15th record high of the year, after the European Central Bank unveiled a raft of stimulus measures.
The May jobs report is out this morning and the US economy added 217,000 private sector jobs last month. The unemployment rate remained unchanged at 6.3%. Job gains were seen in all industries except the government sector. Wall St. had expected 210,000 jobs to be created so this number is better-than-expected.(CNBC)
For the first time since December 2007 we have a record in the number of people working in this country. Every post WW two recession saw an average of 44 months to recover the jobs lost in the recession. This time it has taken 77 months to recover all the jobs lost in the 2008-09 recession. And even though we have recovered all the jobs lost in the recession the US has 12.5 mm more people which is why the unemployment rate remains high.(marketwatch.com)
And maybe we can all learn a little something for the baseball legend Don Zimmer who died on Wednesday at 83. Never Retire. Zimmer started in baseball in 1949 and worked in baseball until a month before his death. He always said, do what you love and with a little luck you'll keep doing it for as long as you live. He sure did!
US Stocks traded higher yesterday with the S&P 500 Index hitting yet another record high close.
This morning the European Central Bank cut interest rates and added a negative rate on bank deposits for the first time in their history. The ECB will now charge commercial banks .10% to hold their money. The ECB is scared of deflation in the Eurozone and hopes banks will now lend money b/c it will now cost them to hold it.(marketwatch.com)
US Jobless claims rose 8,000 last week to 312,000 which is still near post-recession lows and should continue to push the unemployment rate lower.(yahoo finance)
Sprint and T-Mobile have agreed on broad terms of a merger worth about $50 Billion. Under the deal Sprint would acquire T-Mobile and create the 3rd largest wireless operator behind AT&T and Verizon, and give consumers fewer choices for wireless service. Shares of Sprint and T-Mobile both rose on the news.(marketwatch.com)
And Nike wasn't joking when it said it looks forward to a deeper partnership with Apple. Nike is building a shoe that can be tied and tightened with an iPhone app. (because we all know how hard it is to bend over and tie our shoes). Apple also announced this week at their developers conference that their new operating system will work closely with Nike's fitness measuring digital tools. Apple's CEO Tim Cook is also on Nike's Board.(Portland Business Journal)
The ADP jobs report says the private sector added 179,000 jobs in May. That is below what the market expected, but not a bad number. The number was led by manufacturing and construction. Professional services declined. (CNBC)
US non-farm productivity for the first quarter declined 3.2% in May. The cost of labor grew by 5.7%. (Fox Business News)
A&T boosted its 2014 revenue forecast as it anticipates adding 800,000 new customers in the second quarter. The new revenue twist is the “Next” installment plan for those who want a smartphone but not make a two year commitment. That made up 40% of wireless sales for Ma Bell in Q1. (Bloomberg)
They were fighting for your breakfast dollar and now the battlefield has moved to your lunch money. Dunkin’ Donuts is introducing a new chicken lunch sandwich after Starbuck’s rolled out seven new hot lunch sammies at some locations. This is an area where the companies can grow, since 65% of all traffic at coffee and donut shops happens in the morning. (Bloomberg)
The average US home price rose 10.5% in April compared to the year before. Prices in Oregon were up 11.8%. These respectable gains are the smallest in 14 months. (CoreLogic)
Another day another record on both the S&P 500 and the Dow Jones Industrial Index. That has now happened three sessions in a row. (CNBC)
Markets seesawed yesterday in early trading as the Institute for Supply Management twice incorrectly reported their factory production index number for May. But when it was all said and down the number showed manufacturing in the US expanded in at its fastest pace so far in 2014. The number was driven higher by strong orders and auto production. (Bloomberg)
China’s factories showed their best performance in four months in May as export orders rebound. However figures show factory production is still contracting. (Associated Press)
Trading volumes at discount brokers is seen as a measure of investor confidence. Those numbers have been showing a downward trend since the end of last year. E*Trade says their volume in May was down 9% from the year prior. (Reuters)
A ballot measure to get the State of Oregon out of the hard liquor business and put it back in the hands of private entrepreneurs is now collecting signatures for the November ballot. The deadline to collect signatures is July 3rd. (Oregon Live)
We finished May at record levels on the S&P 500. The index advanced 2.1% during the month and is up 4.1% on the year. (Fox Business News)
While we played this weekend China reported that their manufacturing sector expanded at the fastest pace in five months. China has undertaken a mini-stimulus plan over the last few months that appears to be working. (Bloomberg)
The free market is back at work again. Since government subsidies started declining in 2010 investments in renewable energy, like wind and solar, has declined 5% in North America to a low of $56 billion. That compares to $168 billion spent on exploration by the oil and gas industry. (Bloomberg)
Two new reports say the US could create a million new jobs and lower its energy bill if it ended its crude oil export ban. The US is producing more oil and gas than it has in 40 years. Lifting the ban could mean $750 million in investment over the next 15 years in our new oil patches. (Reuters)
The National Labor Relations Board has ruled the longshoreman union at the Port of Portland has illegally undertaken an intentional worker slowdown. The NRLB has issued a “cease and desist” order to the Union. (Oregon Live)