Business News Archives for 2018-11

Big Day!!

Another key fundamental pointing towards the positive is the acceleration of wage growth, with average hourly earnings up 3.1% from a year ago, the fastest growth since 2009. Meanwhile the employment cost index, an alternative measure of worker compensation, is up 2.8% from a year ago, also the largest increase since 2009. And don't let anyone tell you that this just shows the "rich getting richer." The fastest gains in weekly earnings are being made near the bottom of the income spectrum, not the top. (FT Advisors)


With discounts starting early and more days to shop before Christmas this year, fewer people turned out for the five-day shopping extravaganza that runs from Thanksgiving Day to Cyber Monday, the National Retail Federation said. (CNBC)


Housing market struggles continue, but outlook may be improving. S&P CoreLogic Case-Shiller's index showed home values continued to rise at a brisk pace in September (5.1%); however, growth was below levels seen in August (5.5%) and decelerated for the sixth straight month. Despite the negative trend, decelerating prices may encourage more buying activity in the months ahead as rising wages have a chance to narrow the gap. (LPL)


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

2 Consecutive Up Days

Another sign of a strong economy. The Conference Board's Leading Economic Index (LEI) is one of our favorite economic indicators. Last month it came in slightly above September and up 5.9% year-over-year (YoY).


The seven recessions since the early '70s all saw the LEI go negative YoY an average of eight months before the eventual recession. (LPL)


Plant-based protein company Beyond Meat has filed for a $100 million initial public offering, as vegan and meat alternative food products gain in popularity. (CNN)


The University of Michigan's monthly survey of consumers slipped to 97.5 in November, it was 98.6 in October's.

The "U-6" unemployment rate, sometimes referred to as the "true unemployment rate," which includes discouraged workers and those working part-time who say they want full-time jobs, is 7.4% right now. That rate was lower from late 1999 to early 2001 at the peak of the original internet boom, bottoming at 6.8%. So, by that standard the economy could be doing better. But the gap between 7.4% and 6.8% is relatively small in a data sense, and a huge decline from the peak in 2010 of 17.1%. (FT Advisors)


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

More Trade Concerns

China’s demand for oil byproduct gasoline, dropped to the lowest level in 13 months, according to a Reuters.

Retail sales will rise 4.83 percent this year, compared to a 4.2 percent in 2017. Strong consumer confidence and big demand for consumer appliances, sales of which are poised to soar 15.2 percent, are the drivers. Jewelry will be up an expected 5.2 percent, and men’s apparel, up 12.7 percent. (FBN)


Online sales Black Friday jumped 23.6 percent from a year ago, according to a new report from Adobe Analytics.
The Friday after Thanksgiving this year was also the first day in history to see more than $2 billion in sales stemming from smartphones. Cyber Monday sales online are expected to set a new record of $7.8 billion, up nearly 18 percent from last year. (CNBC)


Reuters reported that the US Department of Agriculture has “paid out nearly $840 million to farmers as part of a $12 billion aid program to offset losses from the imposition of tariffs on American exports.” The top five commodities being soybeans, wheat, corn, dairy and hogs. The five states that received the highest amount of aid were Illinois, Iowa, Kansas, Indiana and Minnesota.


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

Post Holiday Rebound

According to a new Funding Circle survey, 76% of Amazon Prime members in the US – and 77% of all consumers – “are willing to go out of their way and pay more for a holiday purchase at an independent, small local business than buy from Amazon.” Another 60% of those surveyed “said they are willing to pay 10% or more because they like the idea of supporting a local business and its local jobs, and keeping the money within their communities.” 
24/7 Wall St. has compiled a list of the 25 most innovative cities in the United States based on the metropolitan areas with the highest number of patents issued per 100,000 city residents. Corvallis, home of Oregon State University was number 10 on the list.
U.S. grain farmers are plowing under crops, leaving them to rot or piling them on the ground, in hopes of better prices next year. It's one of the results, they say, of the Trump administration's trade war with China. (Reuters)
Kroger, owner of Fred Meyer and Food4Less in Oregon, is building its first robotic warehouse in Cincinnati. It is the first of around 20 such warehouses they will build. (LI)
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.

Dead Cat Bounce?

The number of building permits issued last month (1,263k) topped estimates (1,260k) but was down from September. A pick-up in multi-unit construction starts offset a decline in single-family homes, though permits issued dropped in both sectors. Data from the National Association of Home Builders showed U.S. homebuilders' confidence dropped to the lowest level since August 2016 amid a significant slowdown in new home sales and rising interest rates. (LPL)


Corporate spreads jump. Credit markets are now sharing global stocks' angst over trade and oil. Spreads on investment-grade and high-yield corporate debt have jumped to their highest levels since December 2016, following a spike in credit-default swap prices. (LPL)


The Federal Reserve says industrial production rose 0.1% in October over the month earlier, it marked a 4.1 percent increase over 2017. Manufacturing production rose 0.3 percent in October over the prior month, which was the fifth straight month of gains.


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


With 92% of S&P 500 Index companies having reported, third-quarter earnings growth is tracking to an impressive 28.1% year-over-year increase, the highest since Q4 2010. Revenue results have also been very good, supported by strong economic growth. S&P 500 revenue has increased 8.5% year over year. (LPL)


The Energy Information Administration (EIA) reported that US crude supplies rose for the 8th straight week to 442.1 million barrels. October’s core US CPI reading came in at 2.1% Year-over-Year, aided by moderate housing price pressures from rentals. More significant price changes were concentrated in volatile categories such as energy and food. (GS)


The IRS announced tax code parameters for 2019, implementing a new method for making inflation adjustments, resulting in higher tax payments, and government revenue, over time. The move erodes some of the benefits for the Trump tax cut. (WSJ)


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

A Short Week

It may seem extreme, but it is about average. Last Thursday the S&P 500 gained more than 1%, making it the 50th time so far in 2018 that the index has gained or lost at least 1%. This is well above the historically calm 2017, in which the S&P 500 moved 1% only eight times. On average, the S&P 500 has moved 1% about 50 times each year since 1950. (LPL)


Ride-hailing service Uber's losses ticked up to nearly $1 billion during the third quarter and annualized growth is continuing to slow, according to the private company's self-reported financials for Q3. (CNBC)


Columbia Helicopters will retain its Aurora headquarters and all its 850 employees following its sale to the Bristow Group, based in Texas. Bristow paid $560 million, $492 million in cash and the remainder in stock. (Oregon Live)


Oregon State graduate Pat Egan will become chief executive officer of Warren Buffett’s See’s Candies in 2019 after working at a Berkshire Hathaway Inc. utility, NV Energy. He will be only the third CEO since Berkshire acquired See’s more than 40 years ago. (Bloomberg)


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


Retail sales reverse two-month slide. Retail sales rose 0.8% in October. The U.S. consumer is the healthiest in years, aided by fiscal stimulus and modestly accelerating wages, and strong consumer demand will drive output going forward. (LPL)


Tensions are heating up over U.K. Prime Minister Theresa May's proposed plan for the country's exit from the European Union. European stocks have dropped 1% over the past two days, and global equities could endure volatility amid Brexit-related headlines. (LPL)


Trade and auto disruptions weighed on the German economy. The German economy contracted during Q3 as gross domestic product (GDP) shrunk by 0.2%. Weak auto sales were largely to blame. (LPL)


Japan's economy was dragged down by temporary factors, as GDP slipped 1.2% during Q3. Weather disruptions were mostly to blame, including an earthquake, typhoons, and torrential rain. (LPL)


Levi Strauss plans IPO that values company at up to $5 billion. The 145-year-old American icon is looking to raise between $600 million and $800 million. (CNBC)


The S&P 500 is down 15 and the NASDAQ is down 64. MSCI International index is lower.

Oil is up 97 cents at $57.41 a barrel.

Gold is up $2 at $1217 a Troy ounce.


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

5 Down Days

The S&P 500 closed down yesterday, its fifth straight day of losses. It's now in the red for the month of November. 

Does market volatility seem more elevated than you are used to? Through the first half of 2018, the market saw 39 days in which it experienced a 1%+ move—more than double the number of days for all of 2017. (Capital 360)


With 90% of S&P 500 companies having reported, S&P 500 Index profit growth is tracking to an impressive 27.9% year-over-year increase, the highest growth rate since the fourth quarter of 2010. Sales growth is tracking to an 8.5% year-over-year increase. The strong top line performance, clearly boosted by a strong U.S. economy, is particularly impressive given there is no direct benefit from the lower corporate tax rate. (FactSet).


Hazelnut growers in Oregon were anticipating harvesting 52,000 tons of hazelnuts but instead processors say they are looking at between 46,000 to 48,000 tons, which is higher than last year's 32,000 tons and still a record. Hazelnut acreage has doubled in Oregon over the past decade, up to 72,353 acres. (Oregon Live) 


Chick-fil-A will begin delivering from more than 1,100 of its restaurants around the United States. (USA Today)


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

Lumpy Market

Stocks pause after back-to-back weekly gains. After rebounding from October's volatility spike over the past two weeks, investors used negative headlines tied to a few bellwether firms in the U.S., along with political tensions in Europe and Washington as reasons to take some gains off the table. (LPL)


Emerging markets equities have started to show some signs of life, having bounced nicely off of the 10/29 lows (+6.8%, slightly ahead of the S&P 500 Index). (LPL)


Oil struggling after plunging 7 percent yesterday, with surging supply and perceived falling demand. WTI has lost over a quarter of its value since early October. (Reuters)


Small business owners delivered another near record month of optimism in October. The index shed a modest 0.5 points for a 107.4 reading. Meanwhile, the percent of owners with one or more unfilled job openings was at a 45-year, all-time high level. (NFIB)


Kellogg is selling its Keebler, Famous Amos and fruit snacks businesses. It is consolidating its morning foods, snacks and frozen foods business units.  (CNBC)


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

NWQ AM Financial News

The number of women-owned businesses is on the rise. Four in 10 companies in the U.S. are now majority-owned, operated, and controlled by women, according to CNBC.


The Wall Street Journal reported that US companies are raising prices on their products after years of low inflation. Food makers, manufacturers, and airlines are among the firms that have announced price increases.


According to the Stanford Center on Longevity one-third of baby boomers had no money saved in retirement plans in 2014, when they were on average 58 years old. Among boomers with positive balances, the median savings was around $200,000.


One-third of homeowners over the age of 65 were still paying off a mortgage in 2012, compared with less than a quarter of people in 1998 — and the median amount they owed nearly doubled to $82,000 from $44,000. (Stanford Center)


The number of people aged 60 and older with student debt quadrupled between 2005 and 2015, to 2.8 million from 700,000. (Stanford Center)

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

Rising Rate Concerns

According to the Mortgage Bankers Association mortgage applications to purchase a home fell 5 percent for the week to the lowest level in two years. Purchase applications were 0.2 percent lower than a year ago. Mortgage applications to refinance fell 3 percent last week and are 33 percent lower than a year ago.


Trump critic and Wall Street foe, Rep. Maxine Waters, will take control of the House's financial services committee. She has been the top Democrat on the banking panel since Barney Frank retired in 2013. (CNBC)


Kraft Heinz is selling its Canadian natural cheese unit to Italy's Parmalat for $1.23 billion. (CNBC)


The Girl Scouts has filed a trademark infringement lawsuit against the Boy Scouts of America after the Boy Scouts decided to drop "Boy" from its namesake program and start welcoming older girls. The Girl Scouts, founded in 1912, are trying to avert an erosion of its brand and membership. (CNBC)


The S&P 500 is down 10 and the NASDAQ is down 54. MSCI International index is lower.

Oil is down 92 cents at $59.75 a barrel.

Gold is down $7 at $1218 a Troy ounce.


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

NWQ AM Financial News

Stocks end sharply higher yesterday, following closely watched midterm elections that saw Democrats take control of the House and Republicans retain their hold on the Senate.  The surge in stocks marks the best post-midterm election rally for the S&P 500 and Dow in more than three decades.


Shares of industrial stocks including 3M and Caterpillar rose as some investors viewed the split Congress as a potential mitigator to Trump’s aggressive trade policies.  Shares of big tech companies are also climbing as the specter of regulatory crackdowns against giants including Amazon and Apple fizzled with a divided Congress.


The number of job openings in the U.S. fell in September just a month after setting an all-time high, but companies are still scrambling to find workers and offering higher pay and benefits to attract them.  Job openings slipped to 7 million on the last day of September from a record 7.3 million in August.  Even after the decline, job openings still exceed the 6.1 million Americans officially classified as unemployed.

Moving On

Earnings growth surpasses prior two quarters. With about 75% of S&P 500 companies having reported, earnings growth is tracking to a 27.1% year-over-year increase, up from 25.2% last week and highest since Q4 2010. Meanwhile earnings expectations have held up well. Despite tariffs, S&P 500 earnings estimates for the next 12 months have only been reduced by 0.4% since October 1, less than the average earnings season decline. (LPL)


Data continue to show Chinese economy feeling tariff heat. The Caixin Purchasing Managers' Index showed activity in October fell to 50.1. Of particular interest was the sub-index of new business, which fell to its lowest level since 2008. All of which suggest the U.S. may have the upper hand as negotiations between President Trump and the President of China are poised to officially begin at the G20 summit later this month.


U.S. services sector still on solid footing. ISM's October non-manufacturing index came in at 60.3. Business activity and employment components were down month over month, but new orders were little changed overall. 


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

NWQ AM Financial News

U.S. stocks finished yesterday’s trading session mostly higher but weakness in the technology and internet-relate sectors limited an advance in the broader market. 


Shares of Apple extended their post-earnings slide yesterday, after a report suggested iPhone XR demand might be falling short of expectations.  Apple has curbed plans for additional iPhone XR production lines, while instructing assemblers to build more of the older iPhone 8 and iPhone 8 Plus models than the company had originally ordered.  The company has “signaled disappointing demand for the new iPhone XR.

The home improvement retailer Lowe's said it will close 20 underperforming stores in the U.S. and 31 locations in Canada, as part of a strategic reassessment. The company said most employees at the stores closing will be offered similar jobs at a nearby store, as most of the stores being closed are within 10 miles of another store. 


And the IRS said late last week that Americans will be able to contribute more in their retirement plans in 2019.  Retirement plans like 401k’s, 403b’s, and IRA’s will have higher contribution maximums starting in 2019.

Streak Busted

The S&P 500 increased 1% last Thursday, its third straight gain of 1% or more, the first such streak since June 2016. That streak ended Friday as markets closed down. The S&P 500 hasn't been up 1% on 4 consecutive days since 1982. (LPL)
Europe continues to struggle to produce inflation. Core consumer prices (ex. food and energy) rose just 1.1% in October in the Eurozone on a year-over-year basis. Considering the amount of time the Eurozone has employed highly accommodative monetary policy, it is surprising inflation has stayed this stubbornly low. Low inflation and low interest rates in Europe reflect continued lackluster economic growth. (LPL)
According to Capital One’s Fall 2018 Small Business Growth Index, the “majority of small business owners are optimistic and satisfied with the current small business environment, but at the same time are facing a number of challenges and are concerned about how new governmental policies will a?ect them.” 
This will make Mrs. Reinhart happy with just 50 days till Christmas Starbucks is now offering six holiday beverages. This comes about a week earlier than previous years.
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.                  

Big Jobs Number

The US Department of Labor says the economy added 250,000 new jobs in October. The unemployment rate stands at 3.7%. 


Despite a strong finish to October with a Halloween rally, the S&P 500 suffered its worst month in over seven years with a 6.9% decline. In addition to snapping its 6-month win streak, the S&P 500 fell 16 days for the month, tying the most down days for any month since October 2008. But as has been the case virtually all year, U.S. equities held up better than their overseas counterparts. For the month, the MSCI EAFE Index fell 7.9%, while the MSCI Emerging Markets (EM) Index slid 8.7%. A strong dollar, weaker economic growth, and political risk, particularly in Italy, weighed on European equities, while trade tensions and related weaker economic data dragged broad EM equities including China lower. (LPL)


U.S. productivity grew at an annual rate of 2.2 percent in the third quarter. It marks a slowdown from the previous quarter but is still better than the weak gains seen for most of this nine-year expansion. Labor costs accelerated but still remained at a low level. (CNBC)


Don’t forget to join us this weekend on this great station for Financial Focus Radio. Saturday at 10am and Sunday at 1pm


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

A Clean Slate

Oregon is losing another publicly held company from the State. Electro Scientific Industries, has sold to MKS Instruments of Massachusetts for $1 billion in cash. The $30-a-share price is a little more than double ESI's closing stock price Monday. ESI employees about 220 personal in Oregon.  ESI reported sales in its fiscal second quarter were $85.9 million, up from $71.0 million a year ago. (PBJ)


 ADP report hints to strong payrolls gain. U.S. jobs grew 227,000 last month, the strongest increase since February. (LPL)


Labor costs increase. The Employment Cost Index (ECI) grew 0.8% in the third quarter. Year-over-year, the ECI rose 2.8% through last quarter, its largest increase of the cycle. Wages represent up to 70% of business costs. (LPL) 


China manufacturing hits two-year low. China's official manufacturing Purchasing Managers' Index, is hovering just above the 50.0 threshold dividing economic expansion and contraction. New export orders fell for a fifth straight month due to tariffs implemented earlier this year. The continued slowdown comes despite government efforts to shore up growth, buoy sentiment, and boost liquidity. (LPL) 


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


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