Business News Archives for 2018-02

Are Things Slowing Down?

Macy's had a great holiday shopping season as same store sales climbed 1.4%. The company earned $1.3 billion, or $4.31 per share, in the fourth quarter on revenue of $8.67 billion. (AP)

The Commerce Department on Tuesday reported overall orders for durable goods, items ranging from toasters to aircraft meant to last three years or more, tumbled 3.7% in January. It was the biggest drop in six months.

The Commerce Department also reported the trade deficit rose 3.0% to $74.4 billion in January. Exports fell $3.1 billion to $133.9 billion and imports slipped $0.9 billion to $208.3 billion.

They also said wholesale inventories increased 0.7% percent in January. Retail inventories rose 0.8%.

The S&P CoreLogic Case-Shiller national home prices index increased 6.3% compared with December 2016.

Genworth Mortgage Insurance reports first-time buyer share of single-family home purchases was 38% in 2017, the highest since 2000. First-time homebuyers purchased 7% more homes than in 2016.

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

Single Family Homes Fell 7.8%

Fed Chairman Jerome Powell testifies before Congress today.

The Oregon senate passed a bill last week that would decouple Oregon tax law from federal tax law on the issue of a new federal deduction for pass-through business income. This could mean the federal deductions of the Trump tax reform law will not apply to Oregon small businesses, including LLCs or S-Corps. (Eager Law)

The Commerce Department said sales of new U.S. single-family homes fell 7.8% in January. Home sales are being constrained by a severe shortage of houses, especially on the lower end of the market, that is pushing up prices and sidelining some first-time buyers. In January, there were 301,000 new homes on the market, an increase of 2.4% and the highest level since March 2009. The stock of new homes still remains well below its peak during the housing market bubble in 2006.

The maker of tasty treats like Spam canned ham and Dinty Moore stew, Hormel Foods reported a quarterly profit of $303.1 million. On sales of $2.33 billion. Hormel shares have dropped 10% in 2018 and are down 13% in the last 12 months. (AP)

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

Big Friday...Tepid Week

In the U.S. as major indexes were little changed last week.
Subdued Treasury price changes likely contributed to renewed confidence, as the 10-year yield met resistance just below the key 3% level. European markets were also largely flat on the week, despite a series of economic data points that suggest the economy may be peaking. In Asia, Chinese markets were closed for much of the week following the Lunar New Year; Japan’s Nikkei ended the week modestly in the green. (LPL)

Red Robin reported fourth-quarter profits of $8.8 million, after reporting a loss in the same period a year earlier. The Greenwood Village, Colorado-based company posted revenue of $342.4 million in the period. For the year, the company reported profit of $30 million, on revenue of $1.38 billion. Red Robin shares have dropped 6% since the beginning of the year. (AP)

The Nordstrom family continues work on a deal to take the company private before it reports earnings next Thursday. Reports say Nordstrom has yet to put together a financing package. The family group, owns 31.2% of Nordstrom. (CNBC)

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

All Indicators Point Up

We have now actual read those FOMC minutes that spooked markets on Wednesday despite the central bank striking a decidedly upbeat tone on the U.S. economy. The data cited was consistent with above-trend growth in economic activity, the labor market, and household and business spending.

The Conference Board Leading Economic Index (LEI) for the U.S. increased 1.0% in January to 108.1. The U.S. LEI continues to point to robust economic growth in the first half of 2018. The leading indicators reflect an economy with widespread strengths coming from financial conditions, manufacturing, residential construction, and labor markets.

European economic growth has been impressive in recent quarters but there is some evidence that their economy may be peaking. The latest Eurozone Composite PMI Index for February fell month over month. (LPL)

Stocks over bonds again? The bull market will turn nine next month, but another streak is taking place as stocks (measured by the S&P 500) have topped bonds (measured by the 10-year Treasury bond) for six consecutive years. Should it happen again in 2018, an all-time record will be reached. (LPL)

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

Oregon Gin Brand Sells

Mortgage applications fell 6.6% last week and 3.5% higher than a year ago, according to the Mortgage Bankers Association. Applications to refinance fell 7% for the week and were 2.8% higher than a year ago. Mortgage applications to purchase a home fell 6% for the week and were 3% higher than a year ago.

The National Association of Realtors says existing home sales dropped 3.2% in January. Existing home sales, which account for about 90% of U.S. home sales, declined 4.8% on a year-on-year basis. At January's sales pace, it would take 3.4 months to exhaust the current inventory. A six-to-seven-month supply is viewed as a healthy balance between supply and demand. The median house price increased 5.8% from a year ago to $240,500.

Davos Brands, a New York wine and spirits firm has acquired House Spirits Distillery's Aviation American Gin brand. House Spirits will continue to produce the gin at its distillery in Portland. (PBJ)

Sometimes it is not all rainbows and unicorns in the market but it is somewhere.  Lucky Charms the magically delicious cereal is adding a new charm to the mix for the first time in ten years. A unicorn with pink-and-blue striped mane and horn.  It will appear staring in March. (FBN)

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

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

A Double Dip?

The S&P 500 gained 4.3% last week, for the best weekly gain since early 2013. Of course, this comes on the heels of a 5.2% drop the week before. Nonetheless, after the quickest move to a 10% correction from a new high ever (9 days) for the S&P 500, the recent bounce is quite impressive. (LPL)

With about 80% of S&P 500 companies having reported fourth quarter 2017 results, earnings growth is tracking to a 15% year-over-year increase, 3% better than expectations. Quarterly revenue is tracking to an 8% year-over-year increase. After rising 3% last week, earnings estimates for 2018 are now up 7% since January and reflect a 19% increase over 2017. (LPL)

KFC has been forced to close almost all 900 of its British stores because of a shortage of chicken. The problem arose after the chain switched its delivery contract to DHL.

La-Z-Boy reported quarterly profits of $12.1 million. The furniture company posted sales of $413.6 million in the period. La-Z-Boy shares have fallen 7.5% since the beginning of the year and are down about 1% over the last 12 months. (AP)

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

Day-After-A-Holiday Blues

The Labor Department said U.S. import prices rose 1% in January. In the last 12 months import prices increased 3.6%. Prices for imported oil increased 4.3%, and imported autos jumped 0.5%. Export prices rose 0.8% in January. They have increased 3.4% on a year-on-year basis.

The University of Michigan U.S. consumer sentiment index rose in February to 99.9, the second-highest level since 2004. The current conditions gauge climbed to 115.1. Year-ahead inflation expectations were unchanged at 2.7%.

The Commerce Department said new home construction increased 9.7% in January. Building permits surged 7.4%, the highest level since June 2007.

Rite Aid is merging with Albertsons in a deal that could generate $83 billion in revenue. Rite Aid shareholders will have the right to exchange 10 shares for 1 Albertsons share, as well as $1.83 in cash, or 1.079 Albertsons share. Albertsons would own about 72% of the combined group. The new company will have 4,900 stores, 4,350 pharmacy counters and 320 clinics across 38 states. (AP)

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

Can We Make It Six?

The S&P 500 has recovered about two-thirds of the losses from the recent sell-off, with the Nasdaq recovering about 80%. Both are on five-session winning streaks. (CNBC)

The Labor Department said U.S. producer prices accelerated 0.4% last month. The PPI rose 2.7% in the 12 months. Last month, the cost of hospital outpatient care surged 1.0%, wholesale goods prices increased 0.7%, and gasoline prices rose 7.1%.

The National Association of Home Builders Confidence Index was unchanged in February from the prior month, remaining at 72. A year ago, the index was 65.

Coca-Cola's profits dropped 20% for the quarter. Organic sales were up 6%. Earnings in the period were hurt by a $3.6 billion one-time charge related to new U.S. tax laws. For the year, Coke reported sales of $35.4 billion, down 15% from last year. Water sales grew 2%, coffee and tea grew 2%, carbonated soft drinks were flat and juice, dairy, and plant-based drinks declined 2%. Coca-Cola boosted its annual dividend by 5.4% to $1.56 a share.

Join us this weekend for Financial Focus Radio when Tyler and I will tell you how to respond to these rising interest rates.

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

Bond Prices Fall-Stocks Rise

The yield on the 10-year Treasury climbed to 2.904% its highest level since January 2014, and slightly above the levels of earlier this month. The yield on the 10-year note hit the high exactly midway through the trading day yesterday. (CNBC)

The Commerce Department said retail sales fell in January by 0.3%. Consumer spending increased at a 3.8% annual rate in the fourth quarter. Auto sales fell 1.3%, service stations rose 1.6%, sales at building material stores dropped 2.4% receipts at sporting goods and hobby stores fell 0.8%.

The Labor Department reported consumer prices rose by 0.5% in January That was up 1.8% from a year ago. The 1.7% gain in apparel prices was the biggest since 1990. Women’s apparel costs jumped a record 3.4%, the report showed.

The networking equipment and software company Cisco had a quarterly profit of 63 cents per share last quarter. That beat estimates. They had their first year-over-year rise in revenue in more than two years and announced a $25 billion addition to its stock buyback program. (CNBC)

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

Is the Market in Love?

The NFIB Small Business Optimism Index jumped two points to 106.9 in January. Now Is a Good Time to Expand registered at 32% an all-time record. Actual Earnings climbed up 11 points from December, the highest level reported since 1988. As small business owners struggle to find qualified workers for open positions, reports of higher worker compensation rose four percent, the highest reading since 2000 and among the highest in the 45 years of NFIB’s survey.

In its monthly oil market report, OPEC increased its forecast for crude supply by 1.4 million barrels per day.  The increase in its supply forecast is driven almost entirely by U.S. production, which in November topped 10 million BPD for the first time since 1970 and is expected to surpass Saudi Arabia's production levels this year.

The Department of Agriculture announced it projects farm profits will drop 6.7% in 2018 to $59.5 billion, the lowest since 2006 and down 52% from a record 2013.

A report by outplacement firm Challenger, Gray, and Christmas suggests this season’s flu epidemic is crippling small business productivity. The analysis projects that the season could lead to a total of $15.4 billion in lost productivity for the US economy.  

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


The Ying and Yang Continues

The S&P 500 gained 1.4% yesterday. The Nasdaq advanced 1.6%. The 10-year Treasury yield rose to a four-year high on Monday before closing at 2.858%. (CNBC)

With 70% of the S&P 500 reporting, fourth quarter earnings growth is up 14.7% year over year. A solid 78% have beaten earnings estimates. Energy, financials, and technology have been the biggest contributors to growth. S&P 500 revenue growth is tracking to an 8% year-over-year increase. Estimates for full-year 2018 now reflect an 18.5% increase over 2017. This week, 57 S&P 500 companies will report quarterly results. (LPL)

Restaurant Brands International owners of Burger King, Tim Horton's and Popeye's, said profits in the fourth quarter rose to $395 million. Total sales climbed 11% to $1.23 billion. Same-store sales at its Burger King restaurants jumped 4.6%. (AP)

Pepsi reported a fourth-quarter loss of $710 million. Earnings were hurt by a $2.5 billion one-time charge related to new U.S. tax laws. Sales growth in Europe Sub-Saharan Africa, jumped 11%, Latin America up 6% and North America down 6%. (AP)

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

Officially in a Correction

The S&P 500 is officially in a correction, as it has pulled back 10% for the first time since early 2016. Since 1950, on average there have been about three 5% pullbacks a year, one 10% correction a year, and one 20% bear market decline every seven years. Also, this is the first time in history the S&P 500 went from a new high to a correction in 9 days or less. (LPL)

Volatility continues. Global equity markets fell again last week. Over the past 5 days the S&P 500 has lost 8.5%, marking the worst 5-day stretch since August 2015. To put things in perspective, the S&P 500 pulled back 2.8% (peak to trough) all of last year--the second smallest intra-year pullback ever. Two separate days last week saw larger pullbacks. (LPL)

The Commerce Department says wholesale inventories in December increased 0.4% to a value of $612.1 billion. At current levels, it would take wholesalers 1.22 months to clear their shelves.

Ford is increasing production of the Ford Expedition and Lincoln Navigator by 25%. It says it can sell every single vehicle it produces in the company's Louisville truck plant. (CNBC)

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

Another Crazy Day

Stocks fell sharply on Thursday entering correction territory. The stock indices closed at their lowest level since late November. Stocks are on track to post their biggest weekly decline since October 2008. The 10-year U.S. Treasury yield rose to 2.88%, holding around multi-year highs. (CNBC)


The Chinese yuan was down more than 1% Thursday the currency's biggest one-day drop since August 2015. The move, which does not appear directly related to any government action, but was sparked by strong Chinese import growth (+37% in U.S. dollar terms), which dwarfed forecasts for an 11% gain. (LPL)


While the earnings expansion is global in nature, expectations for earnings growth in 2018 for the U.S. (+17-18% based on consensus estimates) are ahead of the 14% increase expected in emerging markets and the 10% expected in developed foreign markets. U.S. earnings are enjoying the highest number of positive revisions, in large part due to the boost from the new tax law. (LPL)


The S&P 500 is up 8 and the NASDAQ is up 10. The MSCI international index is lower.

Oil is down 90 cents at $60.23 a barrel. Down 8% for the week.

Gold is down $1 at $1319 a Troy ounce.


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


Another Wild Ride

With about half of the S&P 500 having reported results, fourth quarter earnings are tracking to a 13.6% year-over-year increase. A solid 78% of companies have beaten earnings estimates for the quarter. Perhaps most impressive is the revenue upside, with 80% of companies beating consensus forecasts, well above recent and long-term averages in the 50s. (LPL)


Wilsonville-based Flir Systems makers of night vision equipment for the defense industry has sold its Canadian subsidiary Lorex for $29 million in cash. Lorex makes security cameras for retail and small businesses. (Oregon Live)


According the Department of Energy the United States will export more energy products than it imports by 2022. It would mark the first year the U.S. energy exports surpassed imports since 1953.


McDonald’s will spend its tax savings from President Trump’s sweeping tax bill into remodeling stores in the U.S. and opening an additional 1,000 stores worldwide this year. In the fourth quarter, sales at restaurants jumped 5.5% worldwide and 4.5% in the U.S. (CNBC)


The S&P 500 is down 6 and the NASDAQ is down 2. The MSCI international index is higher.

Oil is down 55 cents at $61.24 a barrel.

Gold is down $2 at $1313 a Troy ounce.


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


A Harsh Reminder

With a record 15-month win streak for the S&P 500 on a total return basis still alive as of the end of January 2018, there is little doubt that market participants have been spoiled by the lack of volatility and upward bias in equities. The past week has been a harsh reminder that pullbacks do happen and although it is never fun when it happens, remember that this is a normal part of investing and illustrates why having a plan in place ahead of such pullbacks is so important. Could this weakness continue? Absolutely. But, we do not believe this is the start of a new major bear market; more a potentially healthy shakeout of weak hands. (LPL)

Monday was Jerome Powell's first day as Fed chair, and the S&P 500 dropped 4.1%, marking the worst daily drop since August 2011. We also saw the largest jump ever for the CBOE Volatility Index (VIX) up 115%, closing above 37 for the first time since August 2015. The Dow closed down 1,175 points, which was the largest point drop ever. However, to put things in perspective, it was only the 112th largest percentage drop ever (since 1896). Some streaks ended as well, as the S&P 500 finally corrected 5% for the first time in 404 days (the longest ever), while the S&P 500 turned negative year to date for the first time in 403 days (fifth longest ever). (LPL)

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

Correction Territory

Pullbacks like this are not uncommon historically and happen frequently in normal market cycles. In an average year there are typically pullbacks in a range of 5%-10% with an average recovery time lasting about a month. We hadn’t seen a 3% correction in 445 days until yesterday, which is the longest run in history. This pullback appears to be a very normal event. (Main Mgmt)

The S&P 500 fell 3.8% last week, for the worst weekly decline since early 2016. Volatility continues to rule so far in 2018, as the S&P 500 has now gained or lost at least 2% for the week 3 of the 5 weeks so far this year. To put this into perspective, not a single week last year changed 2% up or down. The 4.6% drop yesterday was the single largest drop for the S&P 500 since August 2011. (LPL)

The Institute of Supply Management index of non-manufacturing activity hit 59.9 in January. Anything above 50 denotes growth.

The Federal Reserve imposed penalties against Wells Fargo blocking its ability to grow and firing four board members following widespread consumer abuses. Wells Fargo will not be allowed to grow its $1.95 trillion in assets until the Fed approves a remediation plan. (AP)

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

Don't Fear the Reaper

Don’t let this market correction scare you into doing something silly.  This market correction is long overdue, healthy and part of a normal market. As long as your portfolio is well diversified, spread across the major asset classes and quality in nature you have nothing to fear.  If you have long maturity bonds, interest rate sensitive products and risky investments now is the time to seek qualified advice. Just to put this in perspective, markets are still up for 2018.

Wage pressures increased in January, with average hourly earnings rising 2.9% year over year, an expansion high. (LPL)

The Commerce Department said orders for U.S.-made goods increased 1.7% in December. In December, orders for machinery rose 0.4%, orders for transportation equipment surged 7.1%, orders for electrical equipment, appliances and components fell 0.9% and orders for computers and electronic products slipped 0.1%.

The University of Michigan's survey of consumer attitudes for January slipped to 95.7 in January. The index now sits only 1.1 points below the 96.8 average reading for 2017 – the highest yearly average in 17 years. The index reached 101.1 in October, the highest level since 2004.

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

Rising Interest Rates Drive Stock Sell Off

The Labor Department says the US economy added 200,000 jobs in January -- 196,000 were private sector jobs. The unemployment rate is 4.1%.

The Labor Department said U.S. worker productivity dipped 0.1% in the fourth quarter. It was the first drop and weakest performance since the first quarter of 2016.
Productivity increased 1.2% in the 2017, the strongest performance since 2015.

The Commerce Department said U.S. construction spending increased 0.7% in December to an all-time high of $1.25 trillion. Spending on private construction projects rose 0.8% to a record high of $963.2 billion.

The Institute for Supply Management said its manufacturing index in January fell 0.2% to 59.1 in December.

Mondelez International beat the street by a penny with quarterly profits of 57 cents per share. Mondelez saw strong growth in emerging markets and strong demand for Cadbury and Oreo products in Europe. (CNBC)

Join us this weekend for Financial Focus Radio when we will tackle the question – Is the correction finally here?

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

A Clean Slate - Welcome February

The S&P 500 had its best January since the 1990s. The Dow hasn't fallen in February since 2009, and the S&P 500 and Nasdaq have only one negative February during that time. (CNBC)

The National Association for Business Economics found 47% of respondents said their sales rose over the past three months and half of the surveys’ respondents said that their wages rose over the past three months. (AP)

The Small Business Admin. found that small business loan origination is still only 40% of pre-financial crisis levels.

According to a joint report from the Food Marketing Institute and Nielsen 70% of US grocery shoppers could be buying online within five years.  

Columbia Distributing will purchase General Distributors based in Oregon City. The acquisition will allow Columbia to have a contiguous service area of the Portland Metro Area and from Salem to Hood River.

The third oldest McDonald’s in America will be demolished on Powell Boulevard in Portland in February. Built in 1962, it is the classic double-arches style designed by architect Stanley Meston. (WW)

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


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