Business News Archives for 2018-03

NWQ AM Financial News

The countdown until Brexit Day has begun, with only a year until the U.K. leaves the EU on March 29, 2019. European leaders have agreed to a transition deal, which extends Britain's de-facto membership until the end of 2020, but there are still several outstanding difficulties: including how the U.K. can leave the single market and customs union, but still maintain full economic access, frictionless trade, and no physical border in Ireland. (SA)

Creating a cross-border trading powerhouse, U.S. exchange operator CME Group has agreed to buy U.K.-based NEX for about £3.9B. The deal would be CME's largest since it bought Nymex for $11B in 2008, and would mark the first time the same company owned the dominant markets for fixed income, foreign exchange futures and their underlying securities. (FT)

As we near the end of tax time, good news for some out there: The percentage of individuals receiving tax audits declined for the sixth consecutive year in 2017 to reach the lowest level since 2002. The IRS, which has lost nearly one-third of its enforcement staffers since the 2010 peak, audited just 0.62% of individual returns in the fiscal year that ended Sept. 30, according to data released today. The audit of about 1 in 160 individual returns in 2017 is down from 1 in 90 in 2010, the peak year in the past decade. (WSJ)

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


NWQ AM Financial News

Equity markets are wobbly once again amid a tech shakeout, but investors today will also be focusing on the U.S. economy and GDP data. The numbers just out this morning show Gross domestic product expanded at a 2.9 percent annual rate in the final three months of 2017, in the Commerce Department's final revision of the numbers.  That was a slight moderation from the third quarter's brisk 3.2 percent pace. (CNBC)

Even after yesterday's $125bn auction, Uncle Sam still has plans to sell another $175bn of debt this week, cumulatively the highest weekly figure since the record set during the 2008 financial crisis. It comes amid concerns about declining federal revenue due to tax cuts, and increased spending in Washington. Those worries have contributed to rising Treasury rates this year. (FT)

Self-driving concerns are spreading across the industry following UBER's pedestrian fatality last week. Nvidia shares lost as much as 10% on Tuesday after the chipmaker announced it would suspend self-driving tests across the globe. Uber has also let its autonomous vehicle permit lapse in California, intending not to operate on "public roads in the immediate future." (SA)

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

NWQ AM Financial News

Yesterday saw the S&P 500 Index post its biggest one-day gain since August 2015. The positive sentiment fed through to global markets with Asian stocks advancing higher overnight, and in Europe, all industry sectors are positive.  (Bloomberg)

While it may be a shortened trading week with the market closed for Good Friday, there is no lack of drivers for the market into the end of first quarter. The latest house price data and Consumer Confidence numbers are due later today, and the U.S. Treasury continues with its record week for debt issuance with nearly $125bn of Tbills and Notes slated to be auctioned today.  (FT)

Saudi Arabia's crown prince will rub shoulders today with top figures from Corporate America and Wall Street, by taking part in the 2018 Saudi US-CEO Forum in New York. Mohammed bin Salman is also drumming up capital and reviewing investment opportunities with an old partner and tech investor, Softbank CEO Masayoshi Son. (SA)

Puerto Rico bonds rallied heavily on Monday after the island released a revised financial turnaround plan thanks to an influx of insurance money and federal aid following Hurricane Maria. While the economy is projected to shrink by about 10.6% in the current fiscal year, the government now anticipates it will expand over 7% in 2019 and continue to grow for years.  (SA)

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

NWQ AM Financial News

U.S. stock index futures are pointing to sharp gains on reports that the Trump administration sent a letter to Chinese economic overseer Liu He setting out specific requests to help slash China's trade surplus with the U.S. They include seeking a tariff cut on U.S. automobiles, more Chinese purchases of U.S. semiconductors, and greater access to China's financial sector by American companies. Treasury Secretary Steven Mnuchin is also weighing a trip to Beijing, with China willing to hold talks over trade differences. (SA)

South Korea is next to escape President Trump's metal tariffs after revising its six-year-old bilateral trade deal with the U.S. It will see Seoul double its import quota for American-made cars and reduce the amount of steel it sends into the United States. South Korea will also allow the U.S. to keep its 25% tariffs on pickup trucks in place for 20 more years. (SA)

Boeing delivered its first 787-10 Dreamliner to Singapore Airlines on Sunday, rounding out a family of lightweight jets on which the U.S. planemaker is betting its future. The Boeing (NYSE:BA) aircraft, which sells for $326M at list prices, has a range of 6,430 nautical miles and seats around 330 passengers, 40 more than the 787-9 and 88 more than the 787-8. (FT)

Finally, Remington Outdoor, America's oldest gunmaker, has filed for bankruptcy protection.  The North Carolina-based maker of firearms and ammunition filed a pre-packaged Chapter 11 filing in federal bankruptcy court on Sunday.  Remington, founded in 1816, said in the filing that it has between $100m - $500m in both assets and liabilities.  (FT)

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

Stocks and Interest Rates

U.S. stocks ended with slight losses yesterday in a volatile trading session, as investors digested an interest-rate hike and the latest commentary from the Federal Reserve.

The U.S. central bank raised interest rates for the sixth time since the end of 2015, as had been widely expected, and it stuck to its prior forecast of three rate hikes in 2018. Some investors had expected a more aggressive pace, with four hikes this year. However, the outlook for 2019 did move up; the Fed expects three rate hikes in 2019, rather than two.

Sales of previously-owned homes snapped a two-month losing streak, jumping 3.0% from January.  It’s a familiar story for housing: supply of homes for sale were at the lowest level for any February on record. At February’s sales pace, it would take 3.4 months to exhaust available inventory, about half the amount of time considered a marker of a healthy market. Supply was 8.1% lower than a year ago, and homes spent an average of 37 days on the market.

It has taken a little more than six months for the U.S. national debt to grow by a trillion dollars.  Last week, the debt hit $21 trillion for the first time, rising from the $20 trillion mark it notched on September 8th.

55% of American Households

Macy's has been testing mobile checkout. The platform allows shoppers to scan bar codes with their phones, as they shop. Discounts and rewards will be applied, via a shopper's loyalty account. (CNBC)

Bend has the last Blockbuster video store outside of Alaska. There are four stores in Alaska. Blockbuster once had more than 9,000 US locations.  In 2011, Blockbuster became part of DISH network. (AP)

Digiday found that just 20% of retailers advertise on Amazon, none of which are spending more than 50 percent of their marketing budget on Amazon. 27% say they plan to advertise on Amazon in the coming year.

USDA data showed importers are buying US corn at the fastest rate since the mid-1990s, as tightening stocks in Latin America prompt a rush to purchase cargoes of the grain from animal feeders worldwide. Net export sales of corn totaled 2.6 million metric tons in the week ended March 8, up 35% from the previous week.

55% of American households subscribe to at least one video streaming service, spending $2.1 billion a month. The average streaming customer has already subscribed to three services. (CNBC)

Long-time Bend businessman and owner of the Bend north Subway, Jeff Moore, passed on Sunday.  He was a graduate of Bend Senior High class of 1980.

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

Day After the FB Sell-Off

The U.S. economic calendar includes the Fed's monetary policy meeting on Tuesday and Wednesday, where analysts expect a 0.25% rate hike announcement. (LPL)

Another shutdown? Political risk is hardly new for investors, but markets may be increasingly focused on Washington, D.C. this week. Congress must agree to details on its spending bill by the end of the week or face another partial government shutdown. A shutdown, which we view as unlikely, would almost certainly be short-lived; but with 60 votes needed in the Senate, an impasse is possible. (LPL)

U.S. stock-focused funds took in $43.3 billion last week, a new record, according to Bank of America. Investor pessimism is at its lowest level since early this year.

Tween store Claire's, with 7,500 stores has filed for bankruptcy. It will restructure $1.9 billion in debt. The company started business in 1978. The company plans to emerge from Chapter 11 in September. Their voluntary Chapter 11 filing should allow them to keep operating while it works out a plan to turn the business around and pay its creditors. (Bloomberg)

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

Online Grocery Delivery

Wells Fargo is in more hot water as U.S. regulators are said to be preparing sanctions for the bank for receiving commissions on auto insurance policies that were forced on more than 500,000 customers. (Reuters)

Walmart is expanding its online grocery delivery service to 800 stores by the end of 2018. The expansion will serve more than 40% of U.S. households. Walmart's grocery delivery business will be supported by a number of partners, including Uber. It expects to make online order pickup of groceries available at about 2,200 stores before 2019. Shoppers will pay a flat delivery fee of $9.95, and an order must contain at least $30 worth of items. (CNBC)

Housing starts fall more than expected. Housing starts in the United States fell 7.0% month over month in February dragged down by multifamily construction starts which dropped more than 26%. Building permits also fell for the month, with permits for single-family homes slipping 0.6%. Despite the drop, it is important to remember that housing starts remain near post-recession highs, and the rate of construction in January was the highest since 2008. In addition, the market remains buoyed by a strong labor market and firm economic fundamentals. (LPL)

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

Oregon's Lattice Semiconductor's

According to the BLS from February 2017 to February 2018, total nonfarm payroll employment rose by 2,281,000, or 1.6%. Employment in mining and logging increased by 58,000, an increase of 8.9%, while construction added 254,000 jobs, or 3.7%.

China's economy looks to be on firm footing, with strong export demand spurring increases in industrial production (+7.2%) and fixed asset investment (+7.9%) over the first two months of the year. Also, retail sales remained strong, growing 9.7% year over year. The data suggest China's estimated 6.5% target growth for gross domestic product is certainly attainable. (LPL)

Oregon’s Lattice Semiconductor's longtime CEO Dan Billerbeck is retiring. He has run the company since 2010. The company makes programmable computer chips for smartphones and digital cameras. (OL)

The Senate votes to ease onerous regulation on small- and medium-sized banks. The move to roll back part of the Dodd-Frank law, which still needs to pass the House, would reduce the number of banks considered systemically important and subject to the toughest oversight by raising the asset threshold from $50 billion to $250 billion. (LPL)

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


Retail Sales Fell

The Commerce Department says retail sales fell 0.1%. That is a three month decline. In February, auto sales fell 0.9%, service stations declined 1.2%, receipts at clothing stores gained 0.4% and sales at online retailers surged 1.0%.

The Labor Department said U.S. producer prices increased 0.2% in February. The year-on-year increase in the PPI is 2.8%.

According to the Mortgage Bankers Association interest rates for home loans have risen each week this year. A drop in refinances last week kept mortgage application volume basically unchanged from the previous week.
The refinance share of all mortgage applications fell to 40%, the lowest since 2008.

Is the Nasdaq finally at new highs? The Nasdaq has had a great year, up nearly 9%. The issue is the strong performance has many saying tech and the Nasdaq are potentially in bubbles. Here's the catch, if you adjust for inflation, the Nasdaq only recently surpassed the record set in 2000. Maybe it isn't as extended as many claim? (LPL)

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


Business Optimism Rose

NFIB’s Small Business Economic Trends Survey for February shows that business optimism rose to 107.6, continuing its streak of record highs that include a jump in the number of small business owners increasing compensation and capital outlays. The historically high readings indicate that policy changes – lower taxes and fewer regulations – are transformative for small businesses.

Job creation remained solid in the small-business sector with 52% of small business owners saying they are currently hiring, but they continue to have difficulty finding qualified workers, according to the monthly National Federation of Independent Business Jobs Report.

The Labor Department says consumer prices rose 0.2% in February. On a year-over-year basis, the consumer price index rose 2.2%. A decline in energy prices helped keep inflation in check while apparel contributed the most to gains.

Vail Resorts is raising the minimum wage at its resorts from $11 per hour to $12.25 per hour. Vail Resorts CEO Rob Katz said that the increase will be covered by a $40 million cash savings that the company expects to see in 2018 from the Trump tax bill. (AP)

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

The Total Labor Force Surged

The Wall Street Journal reports Goldman Sachs' CEO Lloyd Blankfein will step at the end of the year,

Breaking down the jobs report for February a bit further, the headline figure of 313,000 was the most for any month since July 2016. Construction jobs grew by 61,000, professional and business services rose 50,000, manufacturing added 31,000 and retail jobs growth was up 50,000. (BLS)

The total labor force surged by 806,000, the biggest move since September 2003, and now sits just below 162 million. The labor force participation rate rose to 63% the highest since September. (BLS)

Stock buybacks in 2018 have averaged $4.8 billion a day, double the pace for the same period a year ago, according to TrimTabs. J P Morgan predicts that stock repurchases will total about $800 billion this year, a new record.

U.S. Steel has increased its full-year earnings forecast, noting President Trump's tariffs on imported steel and aluminum. The company now expects earnings of $885 million for this year, compared to its prior forecast of $685 million. (Reuters)

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

Average Hourly Earnings Grew

As part of Fridays big jobs report the Labor Department says average hourly earnings grew by 0.1% over last month. Year over year, wage gains were to 2.6%. The strong jobs growth, but contained wage inflation, helps to quell fears of rising inflation.

52% of Disney shareholders voted to reject an executive compensation plan that could reward CEO Bob Iger with up to $48.5 million, a compensation tied to the closing of a planned acquisition of film and TV assets from 21st Century Fox. (FOX).

Shares of Toys R Us debtholders Hasbro and Mattel have seen their stock prices fall after CNBC reported, that Toys R Us may soon liquidate its U.S. operations.

Oregonians won't get a state tax break on money they save to pay for K-12 private schooling even though the Trump tax cuts allow the use of 529 accounts for it. Oregon Democrats said they opposed using the state's college savings plan for private education.

On 10th anniversary of Bear Stearns' collapse, a Senate bill with strong support from both sides of the aisle would loosen regulation for smaller banks.

The S&P 500 is up 5 and the NASDAQ is up 30. The MSCI international index is higher.

Oil is down 46 cents at $61.58 a barrel.

Gold is down $8 at $1316 a Troy ounce.

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

Jobs Boom!

The big jobs report is out, and the Labor Department says the economy added 313,000 jobs in February.  The private sector accounted for 287,000 of those new jobs.  The unemployment rate is 4.1%.

The European Central Bank CB made no changes to interest rates. However, the central bank removed a line from previous statements: "...the Governing Council stands ready to increase the asset purchase program in terms of size and/or duration." The punch bowl is being pulled from the party. (LPL)

Since talk of tariffs and a trade war started, the Russell 2000 is up 3.6%, while the S&P 500 is up 0.5%. The last time small caps did this well relative to large caps was back in November 2016. Year to date, the Russell 2000 is actually up more than the S&P 500. (LPL).

Nordstrom has it bought BevyUp and MessageYes, two digital retailers. Terms of the deal were not disclosed. BevyUp is a platform that allows sales associates and shoppers to communicate with each other and MessageYes allows the company to text customers, leveraging artificial intelligence and integrated payments. (CNBC)

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

Europe gets Hawkish

The Commerce Department says the trade deficit rose to $56.6 billion in January up 5% from the prior month. Exports fell 1.3% in January, and imports were flat.

The Labor Department says unit labor costs rose at a 2.5% annualized rate in the 4th quarter of 2017. Hourly compensation in the fourth quarter was up to a 2.4%. Worker productivity was unchanged. Worker productivity has increased at an average annual rate of 1.2% from 2007 to 2017, below its long-term rate of 2.1% from 1947 to 2017.

The Mortgage Bankers Association says total mortgage application volume was up 0.3% last week. They were 5% lower than one year ago. Mortgage applications to purchase a home fell 1% for the week and was 1% higher than a year ago. The ARM share of mortgage activity increased to 7.3% of total applications, its highest level since June.

The ADP Employment report says private sector companies added 235,000 jobs in February.

Coca-Cola is planning to produce an alcoholic drink for the first time in its history. The drink will be released in Japan. (CNBC)

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


An Irrational Short-Term Mr. Market

Yesterday the S&P 500 rose 0.3% to 2,728 after falling as much as much as 0.4% earlier in the day. The Nasdaq composite closed up 0.6% at 7,372. (CNBC)

The meaningful rise in yields from recent lows in September represent a healthy repricing of economic fundamentals, meaning yields are unlikely to return to those depressed levels. Higher levels of growth and inflation (domestically and globally), in addition to a more aggressive Federal Reserve, are fundamental reasons why higher yields are warranted. (LPL)

Domestic stock funds saw investors withdraw $41.1 billion during February according to TrimTabs. Outflows were evenly distributed between exchange-traded funds (-$19.6 billion) and mutual funds (-$21.5 billion). Global funds went in the other direction, attracting $17.9 billion.


Lego's sales fell in 2017 for the first time since 2004 as the Danish toymaker cleared excess inventories and struggled

with tough retail markets in Europe and North America. (Reuters)

The Commerce Department said new orders for U.S.-made goods in fell 1.4%. The largest drop since July 2017.


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


Prices for Wood Products are Rising

Yesterday the S&P 500 rose 1.1% to 2,721 after briefly trading lower, with utilities as the best-performing sector. The Nasdaq advanced 1% to close at 7,330.

Prices for wood products are rising as lumber yards try to stock up ahead of what looks likely to be a busy home-building season this spring. A lumber shortage has pushed prices to record highs. (Topix)

The problems continue at Wells Fargo as it looks into problematic fee calculations in its wealth management unit. It is also reviewing whether some referrals and recommendations affecting 401(k) rollovers were inappropriate. (Think Advisor)

The Institute of Supply Management's index of non-manufacturing industries slipped to 59.5 but still remained near historic highs. Anything above 50 is expansion.

The International Energy Agency revised U.S. oil output growth up sharply, noting the USA would be producing a total of nearly 17 million barrels per day in 2023. U.S. crude oil production has already risen past that of top exporter Saudi Arabia, to 10.28 million barrels per day.

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

13 Times Out of 19 Days

Since February 5th, when Jerome Powell took over as the new Fed chair, the S&P 500 has moved at least 1% (up or down) 13 times out of 19 days. To put that in perspective, the S&P 500 moved 1% a total of 8 days in all 251 trading days of 2017. (LPL)

Nordstrom saw a healthy 2.6% increase in same store sales in the fourth quarter. Overall net sales increased 6.4%. Nordstrom Rack net sales rose 15%, while same-store sales increased 3.7%. The company reported a fourth-quarter profit of $151 million compared with $201 million a year-ago. Sales came in at $4.6 billion. (AP)

Sam's Club, a division of Walmart, is partnering with Instacart to offer same-day delivery. (CNBC)

More problems for DHL. First it was chicken, now there's a gravy shortage at KFC locations in the United Kingdom. Some restaurant are serving a limited menu, with many not serving gravy at all.  It all originates from a new delivery system using DHL. (Bloomberg)

An Oregon mega-dairy could be shut down immediately in a state lawsuit. Lost Valley Farm opened in April 2017 near Boardman to supply the makers Tillamook Cheese. Its permit allows for up to 30,000 animals. (SSJ)

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

The Sell-Off Continues

The Commerce Department said U.S. consumer prices increased in January by 0.4%. In the 12 months the PCE price index rose 1.7%.

Consumer spending gained 0.2% in January. When adjusted for inflation, consumer spending fell 0.1%. (Reuters)

The Labor Department said claims for unemployment benefits dropped 10,000 to its lowest level since December 1969. It was the 156th straight week that claims remained below the 300,000 threshold, which is the longest such stretch since 1970.

The Commerce Department reported personal income rose 0.4% in January. Wages increased 0.5%, bolstered by bonuses that businesses gave workers as part of the Trump tax-cut. The saving rate jumped to 3.2%.

The Institute of Supply Management's manufacturing index jumped to 60.8 in February.

The Commerce Department said construction spending was flat in January. Construction spending increased 3.2% on a year-on-year basis.

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

Ended the Record 15-month Win Streak

February ended the record 15 month win streak (on a total return basis) for the S&P 500. The good news is March and April are historically two of the best months of the year for equities. In fact, over the past 10 and 20 years, March ranks as the second best month in terms of average return. (LPL Research)

The National Association of Realtors said pending home sales dropped 4.7% in January.

The Conference Board said U.S. consumer confidence jumped to 130.8, a 17-year high, as optimism about employment prospects grew and Americans began seeing additional money in their paychecks from recently enacted Trump tax cuts.

US thermal coal exports increased by 117% last year to 42 million tons. (Wall Street Journal)
McDonald's is partnering with Disney after more than a decade of severed ties. The two parted ways over childhood obesity rates and children's meals at fast food restaurants. In mid-February McDonald's said that it was revamping its Happy Meal menu to offer selections that were lower in calories, sodium, saturated fat and sugar. (CNBC)

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


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