Business News Archives for 2016-06

Going for 3 in a Row

Stock futures are pointing to a higher open as equities look to close out the second quarter by extending Tuesday's big rally into the best three-day gain since February. The Dow and S&P 500 are now back in the black for 2016 and for Q2, but the Nasdaq is still in the red for both periods. Overall, major U.S. averages have now recovered about 60% of their post-Brexit losses. (Sa)

Nearly all of the largest U.S. banks are on steady enough footing to issue dividends or make share buybacks after passing the final round of the Fed's annual stress tests. Deutsche Bank and Santander were the only lenders to fail for a second year in a row, meaning they cannot increase shareholder payouts until they establish a new plan. "Material weaknesses" were also seen at Morgan Stanley, but the Fed allowed the bank to proceed with a dividend hike and $3.5B buyback while it rectifies the issues. (Sa)

Oil is headed for its biggest quarterly advance since 2009, rising almost 30% in the last three months as falling American supply adds to speculation that the global surplus is easing. Data from the EIA yesterday showed U.S. crude stockpiles dropping to the lowest since March and output falling for a third consecutive week. Supply disruptions in Nigeria and Canada, as well as fears over strike outages in Norway, have also given the commodity a big lift.

S&P 500 futures are up 3 and NASDAQ futures are up 2.  The MSCI International Index is up marginally.  

Oil is down $.88 at $49.00 a barrel.

Gold is down $5 at $1322 a Troy ounce.

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

If you would like an audio version for use every business morning contact Troy Reinhart at Northwest Quadrant Wealth Management

Moving On Already?

The global stock rally is extending into a second day, with banks leading the rally after the Dow and S&P posted their best day in four months. Speculation is high that policy makers will take steps to limit any economic fallout and mitigate the "damage" of the U.K.'s vote to leave the European Union.  (Sa)

Airbnb is in talks for a new investment round that would value the rental listing service at around $30B, the NYT reports. That would give Airbnb the second-highest valuation among U.S. start-ups, behind only Uber (about $62.5B) - and triple Airbnb's valuation from two years ago. Funds would go toward international expansion, in addition to a $1B debt facility the company has reportedly secured. (NYT)

Barack Obama, Justin Trudeau and Enrique Pena Nieto will meet at the annual "Three Amigos Summit" today to stress the importance of trade as doubts grow about the benefits of globalization. All three are part of the Trans-Pacific Partnership, the 12-nation trade deal Obama has cast as an update to NAFTA. Ahead of the meeting, Canada dropped its visa requirement for Mexican visitors as of December 2016, while Mexico agreed to open its markets to Canadian beef. (SA)

S&P 500 futures are up 13 and NASDAQ futures are up 29.  The MSCI International Index is up almost 2%

Oil is up $.42 at $48.27 a barrel.

Gold is up $5 at $1323 a Troy ounce.

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

Renewed Risk Appetite Post-Brexit

Volkswagen's price tag to settle lawsuits in the U.S. over its rigging of diesel emissions tests has jumped to more than $15B - $5B more than previously reported - with a settlement expected to be filed in a San Francisco court today. According to several sources, VW's deal includes $10B for the buyback of 475K polluting vehicles and nearly $5B for fines and funds to boost clean-emissions technology. (Sa)

A recovery is taking shape across the globe after a record $3T in market cap was wiped off the board in just two trading days and the pound fell to its lowest level in over 30 years. Hopes of a more coordinated central bank response to support the financial markets and firmer oil prices are helping stocks claw back some of their losses following the Brexit battering. The Dow and S&P are still in negative territory, down 1.6% and 2.1%, respectively year to date.  

Finally, as both the UK's major political parties continue to implode with vicious infighting, David Cameron today attends a final painful EU summit as the UK's prime minister, where he will urge European leaders to consider the key lessons of Brexit and give his analysis of the vote over dinner.  (Ft)

S&P 500 futures are up 22 and NASDAQ futures are up 48.  The MSCI International Index is up about 1.5%

Oil is up $1.21 at $47.54 a barrel.

Gold is down $10 at $1315 a Troy ounce.

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

Brexit Hangover

A bit of a Brexit hangover this morning,  European shares are starting to feel the effects from Friday's historic drubbing. According to Standard & Poor's, $2.08T of stock market value were wiped out across the globe in the previous session, marking the largest ever daily sell-off in dollar terms. Today's aftershocks are also weighing on U.S. equity futures and sent sterling down another 3.1%, as investors seek safety in gold and low-risk government debt. (SA)

Panama officially opened the addition to its sea canal on Sunday, capping a nine-year, $5.4B expansion project that will double shipping capacity and affect global trade routes. A third lane has been added to the waterway that can accommodate a new generation of super cargo ships large enough to carry up to 14K containers, compared with around 5K currently. (SA)

Finally, we'll end on a bit of positive news emerging from Europe today: Spain's ruling conservative popular party increased its vote share in the latest elections, bringing a boost to shares there and leading that market out of the red.  

S&P 500 futures are down 15 and NASDAQ futures are down 37.  The MSCI International Index is down just under 2%.  

Oil is down $.80 at $46.84 a barrel.

Gold is up $10 at $1333 a Troy ounce.

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

We Keep Buying Lots of Stuff

Retail sales rose 0.5% in May. It was the second straight month of gains as sales grew 2.5% from a year ago. Auto sales rose 0.5%, receipts at service stations increased 2.1%, and sales at clothing stores increased 0.8%, the largest gain since November. Online retail sales shot up 1.3%. Sales at electronics and appliance outlets gained 0.3%, but sales at building materials and garden equipment stores fell 1.8%. (Reuters)

May U.S. import prices recorded their biggest increase in more than four years up by 1.4%. Last month, imported oil prices leapt 17.4%, the largest increase since 1999. Imported food prices climbed 0.3%. Export prices jumped 1.1% in May, the biggest gain since March 2011, but export prices fell 4.5% year over year.  (Reuters)

Approximately 8,000 jobs will be cut at Bank of America's in the consumer services area.  This comes as the digital banking revolution gathers speed and reduces the need for back-office staff and bank tellers. Bank of America plans to add sales staff. (FT)

We continue to watch interest rates with the US 10-yr bond at 1.63%, the German 10-yr at 0.01% and the Japanese 10-yr bond is at a negative 0.2%. (Seeking Alpha)

S&P 500 is up 4 and the NASDAQ is up 13.  MSCI International Index is flat. (CNBC)

Oil is down 50 cents at $47.93 a barrel.

Gold is down $5 at $1283 a Troy ounce.

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

More Negative Interest Rates

The Federal Reserve begins a two-day meeting today as worries about Britain exiting the EU seeps deeper into market psyche. No interest rate hike is expected at this meeting. But the world does not seem to care as interest rates are lower with the US 10-yr bond at 1.59%, the German 10-yr at a negative 0.002% and the Japanese 10-yr bond is at a negative 0.007%. (Seeking Alpha)
 
Microsoft is buying LinkedIn in a deal valued at $26.2 billion. It's Microsoft's largest acquisition ever. Microsoft is paying $196 per share in an all-cash deal. LinkedIn had $3 billion in revenue last year, up 35% from the year before. It has 433 million members worldwide. (CNN)
 
Small business confidence moved up in May. The National Federation of Independent Business small business optimism index rose 0.2 of a point to 93.8 last month. The index remains below the 100 reading in reached in December 2014 and its 42-year average of 98.  Small businesses continued to report difficulties finding qualified workers for open positions. (NFIB)
 
S&P 500 is down 7 and the NASDAQ is down 11.  MSCI International Index is down 1.25%. (CNBC)
 
Oil is down 78 cents at $48.10 a barrel.
 
Gold is down 60 cents at $1286 a Troy ounce.
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.

Interest Rates Fall

U.S. stocks are lower this morning, ensnared in a global selloff of more than 3% percent in China and Japan.  This comes ahead of this week's Fed meeting and Britain’s upcoming vote on whether or not to stay in the EU. (CNBC)
 
Consumer attitudes were stable in June. The Index of Consumer Sentiment hit 94.3 in June. Consumers rated their current financial situation at the best levels since 2007. The index of current economic conditions hit 111.7 this month, up from 109.9 in May.
 
AT&T and Verizon will compete in the final round of bidding for the core internet assets of Yahoo. Offers in the last round were in the $3.5 billion-$5 billion range. (Fox Business News)
 
Interest rates are lower with the US 10-yr bond at 1.63%, the German 10-yr at .03% and the Japanese 10-yr bond is at a negative 0.001%. (Seeking Alpha)
 
S&P 500 is down 5 and the NASDAQ is down 15.  MSCI International Index is down 1.50%. (CNBC)
 
Oil is down 50 cents at $48.50 a barrel. Oil prices are lower, after marking their fourth positive week in the past five weeks. Oil lost nearly 3% percent Friday, after weekly rig count numbers showed an increase. (MarketWatch)
 
Gold is up $11 at $1287 a Troy ounce. This is its highest price since mid-May, driven higher by a retreat of the dollar and by rising risk aversion. (Reuters)
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.
 

Friday Morning Sell-Off

J.M. Smucker posted quarterly profits of $191 million. They posted a loss at the same time last year. The maker of jams, peanut butter, syrups and more had sales of $1.8 billion. For their just completed fiscal year, the company reported a profit of $689 million. Smucker shares are up 8% in 2016 and up 20% in the last 12 months. (AP)
 
Ski season just end for us here in Oregon and ski resorts are tallying up their business. Publically traded Vail Resorts quarterly sales climbed 12% to $648 million. Profits jumped 18% to $158 million. Lift revenue climbed 17%, ski school sales were up 12%, and dining climbed 16%. Early season pass sales for the 2016-17 season are up by almost 30%. Vail stock is trading near its all-time high. (The Motley Fool)
 
It used to be a staple of the County Fair experience but now you can get them year round in the freezer aisle of Walmart. Packaged deep-fried Twinkies, co-developed by Walmart and Hostess, will be exclusively available at Walmart for the first year of their existence. The deep-fried Twinkies were designed to require heating prior to consumption. (AP)
 
Join us this weekend for Financial Focus Radio – the truth in wealth building – when we will school you on how to be a millionaire.
 
S&P 500 is down 13 and the NASDAQ is down 31.  MSCI International Index is down 1.87%.
 
Oil is down 75 cents at $49.84 a barrel.
 
Gold is down $2 at $1271 a Troy ounce.
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.
 

It's a Long and Winding Road

Markets are volatile and it has all been to the upside lately.  As of yesterdays close the S&P 500 had gone 43 trading days without a decline of 1% or more. That's the longest stretch without a big decline since the 66-day period that ended in July 2014.  Compare that to early 2016 when in mid-February, the S&P 500 suffered three plunges of 1% or more in just five days. Lesson to be learned? --- Be in it for the long-term and expect short term and temporary declines. (FactSet)
 
Total mortgage application volume jumped 9.3% last week. Applications to refinance increased 7% and are nearly 14% higher than one year ago. Mortgage applications to purchase a home jumped 12% for the week and down 6% one year ago.  The 30-year fixed-rate mortgage rate is 3.83%. (Mortgage Bankers Association)
 
Hiring was little changed in April. Job openings hit 5.8 million at the end of the month. The job openings rate was 3.9% with the biggest increase in wholesale trade, transportation, warehousing, and utilities.  April hires were 5.1 million and there were 5 million separations. (Bureau of Labor Statistics)
S&P 500 is down 8 and the NASDAQ is down 16.  MSCI International Index is down 1.26%.
 
Oil is down 60 cents at $50.63 a barrel.
 
Gold is down $2 at $1261 a Troy ounce.
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.

Productivity Remains Sluggish

Nonfarm productivity fell less sharply than previously thought in the first quarter, but labor-related costs still surged as companies employed more workers to boost output. Productivity, which measures hourly output per worker, contracted at an annualized rate of 0.6%.  Productivity fell at a 1.7% in the 4th quarter of 2015. Productivity has only increased in two of the last six quarters. Productivity increased at an annual rate of less than 1.0% over the last 5 years. (Reuters)
 
Chinese exports dropped 4.1% year-over-year, more than double April's 1.8% fall. Chinese imports edged down 0.4%. For the first five months of the year, annual exports are 7.3% lower while imports are down 10.3%. (CNBC)
 
Yahoo is auctioning off 3,000 patents in a sale that is hoped to raise more than $1 billion. The move comes as the company appears to have a plan to sell itself in bits and pieces. They are in the middle of a sale of their core internet business for $3 billion to Verizon. (Wall Street Journal)
 
The World Bank cut its 2016 global growth forecast to 2.4% from the 2.9% it estimated in January. They cite continued low commodity prices, sluggish demand in developed economies, weak trade, and slowing capital flows. (CNBC)
 
S&P 500 is up 5 and the NASDAQ is up 10.  MSCI International Index is flat.
 
Oil is up 68 cents at $51.04 a barrel.
 
Gold is up $11 at $1258 a Troy ounce.
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.

Oil Exports Climb

Markets look to move higher this morning as we move to within 1% of all-time highs. Yesterday Fed Chair Janet Yellen said there likely will be two rate hikes this year, contrary to current market expectations. (AP)
 
Daimler Trucks North America is laying off 170 workers at its Portland plant. This comes as the company reduces its North American headcount by 1,240. Daimler employs some 1,000 in Portland. The layoff is expected to be temporary. The action is effective July 1st. (Portland Business Journal)
 
Last December the U.S lifted its 40-year old ban on exporting crude oil. Since then oil exports have increased sevenfold. The U.S. exported 15.7 million barrels of oil in March that is 508,000 barrels per day. Japan and Italy were the biggest buyers. Exports were almost 6% of total U.S. production. (CNN)
 
FedEx is raising its quarterly dividend by 60% to 40 cents a share. The hike is significantly higher than the delivery company's past two dividend increases. (WSJ)
 
S&P 500 is up 4 and the NASDAQ is up 10.  MSCI International Index is up 1.12%.
 
Oil is up 50 cents at $50.19 a barrel. Oil prices hit nearly eight-month highs, after crude increased 2.2% Monday closing at its highest price since July 2015. (Reuters)
 
Gold is down $8 at $1240 a Troy ounce. After sliding 6% in May gold has risen about 2.4% percent so far in June. (CNBC)
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.

Jeld-Wen Goes Public

Stocks are higher this morning as Fed Chair Janet Yellen gives a speech at 9:30 this morning and investors will look for clues on a possible June interest rate hike. (CNBC)
 
Sixty percent of business economists say that uncertainty about the November election is damaging prospects for growth this year. The National Association for Business Economics has reduced expectations for this year, seeing growth in gross domestic product at just 1.8%. Political uncertainty around the world is also a cause for concern, as 1 in 4 economists noted the rise of nationalist views around the globe as the most important factor holding back the world's economy over the next two years.
 
Jeld-Wen, once Oregon's largest private company, is officially going public. The company is now headquartered in Charlotte, North Carolina. The window-and-door manufacturer says it will sell $100 million in stock, but could sell as much as $500 million. Jeld-Wen nearly collapsed during the housing crash and sold to the Canadian private-equity firm Onex Corp. in 2011 for $871 million. (Oregon Live)
 
S&P 500 is up 6 and the NASDAQ is up 11.  MSCI International Index is flat.
 
Oil is up a buck at $49.50 a barrel. The average price of gasoline is up six cents over the past two weeks to $2.37 a gallon. Gasoline has risen 60 cents over the past 15 weeks. The U.S. average diesel price is $2.39 per gallon, up 6 cents from two weeks ago. (AP)
 
Gold is up $2 at $1245 a Troy ounce.
 

Layoffs at Five Month Lows

The ISM manufacturing index was 51.3 in May showing expansion. April construction spending fell 1.8%. In China, their manufacturing PMI fell to 49.2 in May, below the neutral 50 value for the 15th-straight month. (CNBC)

Consumers were feeling less optimistic for the second month in a row with the Consumer Confidence Index falling to 92.6 in May. A slightly larger share of consumers in the survey said that current business conditions were "good," but the share that said conditions were "bad" also increased to 21.6%, up from 18.2%. (Reuters)

General Motors sales plunged 18% in April. Chevrolet Silverado truck sales fell 12.7%. The decline for May is not seen as the start of a slide for the industry. Most analysts had expected a drop in sales. Ford sales fell 5.9%.  F-Series pickup sales rose 9%. (Bloomberg)

Employers in May had the fewest layoffs in five months. Layoffs totaled 30,157 last month, a 27% decline from the year ago.  The energy sector continued to be the biggest job cutter with 7572 layoffs in May. For the year, the sector has cut 75,232 jobs, 25% more than the same period last year. The computer industry cut 2,836 last month.  (Challenger, Gray & Christmas)

S&P 500 is down 3 and the NASDAQ is down 4.  MSCI International Index is flat.

Oil is flat at $49.00 a barrel.

Gold is up $5 at $1219 a Troy ounce.

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

Lots of Consumer Data

The S&P/Case-Shiller Home Price Index rose by 5.4% in March from the same time last year. Limited supply of homes on the market is supporting price gains. The biggest gains continue to be found in the Pacific Northwest where in Portland prices rose 12.3% year over year. Seattle rose 10.8% and Denver up 10%. (CNBC)
 
Lots of consumer data. Consumer spending recorded its biggest increase in more than six years in April up 1% last month. The PCE price index rose 0.2% last month. In the 12 months through April the PCE rose 1.6%. Personal income increased 0.4% last month. Wages and salaries rose 0.5%. Spending is outpacing income, savings fell to $751.1 billion last month from $809.4 billion in March. (Reuters)
 
Apple will issue bonds in Taiwan raising $1 billion.
In December, Intel $915 million of 30-year bonds with yields of 4.7% and Anheuser Busch InBev issued $1.47 billion in 30-years bonds at 4.92%. These U.S. dollar bonds have are callable after the second year. (Reuters)  
 
Under Armour issued a sales warning based on the bankruptcy of sporting goods retailer Sports Authority. UA says it will only see about a quarter of the revenue it had originally expected from sales at the bankrupt retailer. (CNBC)
 
S&P 500 is down 6 and the NASDAQ is down 11.  MSCI International Index is down.
 
Oil is down 50 cents at $48.50 a barrel.
 
Gold is up $4 at $1222 a Troy ounce.
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.
 

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