U.S. stocks bounced off intraday lows but still traded mostly lower yesterday as investors monitored separate congressional testimonies from U.S. Trade Representative Robert Lighthizer on U.S.-China trade negotiations and a second day of Congressional hearings featuring Federal Reserve Chair Jay Powell, plus Michael Cohen’s house oversight committee testimony.
 
During his testimony, Lighthizer said the U.S. will take steps to formally abandon plans to increase tariffs on $200 billion of Chinese goods to 25%, from 10% now, while the two sides continue talking. President Trump indicated Sunday that the tariff hike, which could have taken effect at 12:01 a. m. Saturday, would be suspended.
 
The S&P CoreLogic Case-Shiller 20-city home price index rose a seasonally adjusted 0.2% in December compared to November and was 4.2% higher compared to a year ago. That was the slowest pace of annual growth since November 2014.  Home price growth is screeching to a halt, and yet prices are still increasing much faster than wages.  The amount of homes actually sold were 2.3% lower than a year ago, making January the 13th straight month of year-over-year declines.
 
Amazon does not plan to pay the IRS anything this tax season.  That’s not because of the new tax law. Rather, the world’s largest retailer simply took advantage of long-standing, low-profile tax deductions. It paid its employees in stock, built new warehouses and used tax breaks granted when the company wasn’t profitable.  Amazon’s projected $129 million refund highlights how companies can use the complexities of the U.S. tax code for their own benefit.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones

US Stocks edged slightly lower yesterday after Federal Reserve Chairman Jerome Powell reiterated the central bank's wait-and-see approach in congressional testimony.  The Fed boss's comments come as some economic data have pointed to slower US economic growth.
 
Consumer confidence surged in February and rose for the first time in 4 months, a sign that Americans have regained optimism after the recovery in the US Stock market, the end of the government shutdown and diminished worries about a recession.  The consumer confidence index climbed to 131.4 this month, economist has forecast a 124.7 reading.
 
Shares of Home Depot fell yesterday, after the home-improvement retailer reported fiscal fourth-quarter earnings and revenue that were weaker that expected.  The company blamed poor weather for 4th quarter comp weakness, along with foreign-exchange rates and price deflation.
 
Traveling to the Hawaiian Islands could soon be easier - and less expensive.  Southwest Airlines has been running test flights to the islands as part of its approval process with the FAA to expand routes there.  The budget airline's entrance into the market could lead fares to the state to decrease by 30% across all carriers.  Southwest said it will offer low cost flights to the islands by the end of 2019.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones 

Globally stocks traded higher yesterday as the US and China appear to be closer to reaching a trade deal.
 
Shares of General Electric traded sharply higher yesterday after they reached a deal to sell their biopharma business to Danaher for $21.4 Billion in cash.  GE said the deal will help them pay down debt faster as they continue to try to strengthen their balance sheet.
 
Shares of Tesla dropped sharply after the SEC asked a federal judge to hold the companies CEO Elon Musk in contempt over a recent tweet.  Musk sent another inaccurate and material information Tweet about the company after doing the same thing last fall.
 
The Chicago Fed's Index of national economic activity was lower in January for the first time in 8 months.  Factory output dropped significantly in January pulling down a broad measure of the US economy.  The Chicago Fed Index is a collection of 85 economic indicators.
 
Wholesale inventories rose 1.1% last month.  The rise in inventories could prompt an increase in forecasts for 4th quarter GDP.
 
With Northwest Quadrant Wealth Management I'm Tyler Simones
 

US Stocks sold off yesterday with the Nasdaq snapping an eight-session win streak, as a batch of disappointing manufacturing and housing data unsettled investors. However, the market remains in an uptrend, for now as talks between the U.S. and China progress and the Federal Reserve appears to be in a wait-and-see posture with interest rate hikes.

U.S. home sales fell in January to their lowest level in more than three years and house prices rose only modestly.  The National Association of Realtors said existing home sales dropped 1.2 percent to a seasonally adjusted annual rate of 4.94 million units last month.  That was the lowest level since November 2015 and well below analysts' expectations of a rate of 5.0 million units.  The median existing house price increased 2.8 percent from a year ago to $247,500 in January. That was the smallest increase since February 2012.
 
Autos and airplanes boosted orders for U.S. durable goods in December, but demand was weak in other key manufacturing segments and business investment tailed off at the end of the year.  Orders for long-lasting goods rose 1.2% in December which was worse than expected.

While most Americans are struggling to save for retirement and employee pension programs non-existent, members of congress, who are doing such a great job, receive a lifelong pension of $139,200 which is 100% tax payer funded.  More evidence of a disconnect between lawmakers and mainstream America.  
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones

Stock indexes closed moderately higher yesterday, with the Nasdaq up for an eighth session in a row, following the release of minutes from the Federal Reserve’s January meeting, which showed the policy-setting committee was split on the path for interest rates.
 
Federal Reserve officials broke into two camps about future interest-rate hikes at their January meeting.  One camp of Fed officials argued that rate increases might be needed only if inflation outcomes were higher than their baseline forecast. However, other Fed officials thought it would be appropriate to raise the federal funds rate later this year if the economy evolved as they expected.
 
Samsung introduced its new lineup of premium and pricey Galaxy S10 phones, which will take on Apple's latest iPhone lineup.  The S10 lineup has 4 options including a Foldable option that is going to cost almost $2,000.
 
The ride-hailing company Lyft plans to launch the roadshow for its initial public offering during the week of March 18, making it the first U.S. ride-hailing company to debut in the stock market.  Lyft's larger rival Uber still needs several more weeks for its IPO preparations.  Lyft now expects to be valued at between $20 billion and $25 billion in its IPO. 
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones

U.S. stocks edged higher yesterday following a three-day weekend as another round of U.S.-China trade talks begin in Washington. The market’s gains were led by the consumer staples and materials sectors.

The December retail-sales numbers reported by the government may have panicked financial markets, but Walmart the largest U.S. retailer isn’t sweating it.  The company reported that U.S. comparable-store sales in the January-ending quarter were up 4.2%, beating the company’s previous guidance.  Walmart continues to step up their investment in e-commerce to compete against Amazon and it appears to be working as their e-commerce sales grew 43% last quarter.

The National Association of Home Builders’ monthly confidence index jumped 4 points to a seasonally adjusted reading of 62 in February.   Any reading over 50 signals improvement. Builders are in a sweet spot right now with economic conditions like a strong job market helping them sell more homes and falling mortgage rates making that job even easier.

Oregon Governor Kate Brown is considering selling the state’s workers compensation insurance corporation (also known as saif) or tapping its substantial capital surplus to hold down future pension costs for school districts around the state.  If Brown moves forward with such a plan, it would be her boldest move yet to rein in the runaway costs of PERS.   It’s also one that would face substantial blowback from the business community.

With Northwest Quadrant Wealth Management, I'm Tyler Simones

The capital markets here in the United States were closed yesterday in observance of the Presidents Day Holiday.
 
Investors this week will be looking for lots of potentially market moving events including the release of the Fed Meeting minutes, and 46 companies in the S&P 500 reporting earnings including retail bell weather Walmart.  As usual Fed watchers will be closely listening to the potential for where interest rates are headed.
 
University of Michigan consumer sentiment index for February rebounded, with the index rising to 95.5 from 91.2 in January, which was the worst since November 2016. Economists had expected a 94.0 reading.  The consumer sentiment rebound may be a bit of a relief after the depressing retail sales numbers for December, which showed the worst plunge in nine years. Low inflation expectations, combined with continued confidence in the jobs market and rising wages, should set the stage for consumption.
 
A record seven million Americans are more than 90 days late on their auto loan payments, and millennials are clearly leading delinquency rates, according to a report by the New York Fed.  The NY Fed found that the number of new auto loans and leases appearing on credit reports in 2018 reached a new peak — the highest level in the 19 years they have monitored the data — at $584 billion.

With Northwest Quadrant Wealth Management I'm Tyler Simones

Stocks struggled for direction yesterday vacillating wildly with investors trying to digest a slew of mixed economic reports, earnings reports, and some good news on trade negotiation between the US and China.

 
The US Census Bureau said that retail sales sank 1.2% in December, the largest drop since September 2009, a few months after the end of the Great Recession.  Economists had expected sales to be flat.  Retailers faced plenty of headwinds in December, including a stock-market meltdown, sudden talk of recession, the start of the partial government shutdown and a bout of unusually poor weather.
 
Shares of the Hillsboro based Lattice Semiconductor jumped nearly 30 percent after the company issued a strong outlook for the coming year. Its shares are now at their highest point since 2004.  One of the few publicly traded tech companies still headquartered in Oregon, Lattice makes programmable computer chips used in cameras, phones, telecommunications equipment and other applications.

The IRS released data yesterday showing that the average refund size for the first 12 days of this year’s tax-filing season was smaller than it was during a similar period last year.  The average refund size through Feb. 8 was $1,949, which was 8.7 percent smaller than the same period last year. Some taxpayers that had gotten refunds in the past owe taxes this year.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones

U.S. stocks extended gains yesterday, with the Nasdaq on track to exit bear market territory, after President Donald Trump said he may let a China trade-deal deadline “slide” if the two sides were making enough progress in their meeting this week in Beijing.

The cost of consumer goods and services were unchanged in January largely thanks to falling gas prices, another sign inflation poses little threat to the economy right now.  The government said that the consumer price index was flat last month.  What’s more, the increase in the cost of living over the past 12 months slowed to 1.6% from 1.9%.  Waning inflation has persuaded the Federal Reserve to stop raising interest rates for the time being amid fresh worries about the economy’s future.

The U.S. national debt topped a record $22 trillion this week, less than a year after it crossed the $21 trillion mark, indicating a further deterioration in the nation’s finances.  The Peterson Foundation said the U.S. national debt has risen by $1 trillion in the past 11 months, calling it “the latest sign that our fiscal situation is not only unsustainable, but accelerating.”

The Wilsonville-based Flir Systems is moving aggressively into robotic military equipment, paying $385 million for Endeavor Robotic Holdings.  Monday’s deal follows Flir’s purchase last month of  aerial drone company Aeryon Labs for $200 million.  Flir, best known for night-vision equipment, enjoyed booming sales early this century as the United States fought wars in Afghanistan and Iraq. As the wars ebbed, though, military spending declined and Flir sought to find civilian applications for its technology.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones

U.S. stock indexes closed at their highest levels in 2019 yesterday after lawmakers reached a tentative deal to prevent a government shutdown and as optimism grew over a potential trade deal between the U.S. and China.

The number of job openings in the U.S. surged at the end of 2018 to an all-time high, reflecting the resilience of an economy that keeps growing despite rising headwinds at home and abroad.  Job openings climbed to 7.34 million, an all-time record, in December from 7.17 million in the prior month.

The January small-business optimism index of the National Federation of Independent Business fell 3.2 points to a seasonally adjusted reading of 101.2, the worst reading since the election in Nov. 2016. The expectations components fell particularly sharply, with a 10-percentage point decline in those expecting the economy to improve. "Overall, the January data reveal a solid small business sector that has some increased concern about how uncertainties may resolve themselves later in the year.

The Oregon Senate voted 17-11 Tuesday to make Oregon the first state in the nation to adopt statewide rent control and make it harder for landlords to evict tenants without a reason.  Under Senate Bill 608, landlords across the state could raise rent no more than 7 percent per year, plus the annual change in the consumer price index. The bill carves out an exemption for rental properties that are less than 15 years old.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones

Stocks struggled to find direction yesterday with investors focused on US/China trade negotiations kicking off this week in Beijing.  If a deal isn’t worked out ahead of the March 1st deadline tariffs on Chinese goods will increase to 25%.
 
For the first time ever, consumer credit has risen above $4 trillion, the Federal Reserve said Thursday.  With low unemployment and steady income growth, consumers have been tapping into credit lines. Before any alarm bells are sounded though, it is important to note that overall consumer credit growth has been on a downward trend.
 
So far in 2019, the 30-year-fixed-rate mortgage has averaged 4.46%, down from the 4.54% average in 2018.  Mortgage rates track the bond market which has seen yields fall over concerns over a global growth slowdown.
 
With more seniors than ever aging in place and choosing not to sell the family home, an estimated 1.6 million fewer properties are now available in a market already experiencing a critical shortage, according to Freddie Mac.  That stay-put trend is crashing into the rising demand for housing from the huge millennial generation: fewer homes for sale will continue to put upward pressure on already overheated home prices.

With Northwest Quadrant Wealth Management I'm Tyler Simones

US Stocks finished mostly unchanged last week with earnings season coming to an end, investors are now focused on trade negotiations between the US and China.  Investors are also focused on Washington and the looming second government shutdown possibly starting on Friday.
 
You can thank falling inflation for the 5 week rally in the stock market.  The Federal Reserve did an about-face last month after they raised rates in December.  The decline in inflation gave the Fed the cushion to leave rates unchanged with the consumer price index at it's lowest level since the summer of 2016.  There is now a 50/50 chance that the Fed actually cuts rates sometime in 2019.
 
The first tax-filing season under the new tax law has gotten off to a slow start with filers seeing smaller average refunds, according to the IRS.  16 million returns have been filed so far with the average refund down 8% to $1,865.
 
And a coalition of more than 150 Oregon farmers, retailers, and other businesses have calculated that Oregon businesses paid $84 million in added tariffs since last October.  Oregon companies also felt the burden of retaliatory tariffs on their finished goods sent to China.

With Northwest Quadrant Wealth Management I'm Tyler Simones

A few details on productivity. The U.S. Labor Department released a few details from its fourth-quarter report on worker productivity. Manufacturing productivity increased 1.3% in the fourth quarter (higher than 1.1% third-quarter growth), while third-quarter nonfarm productivity growth was revised down to 2.2% (from the 2.3% initially reported). (LPL)

If you turned age 70 ½ sometime in 2018, then you must begin taking annual withdrawals from your IRA accounts no later than 4/01/19. If you delay your 1st withdrawal until then, you must also take a 2nd distribution by 12/31/19. The penalty for not taking a required minimum distribution is a penalty of 50%, plus tax on any amounts that were not withdrawn on time (Internal Revenue Service).

2.8 million Americans died in 2018. 4,000of those individuals, 1 in every 700 deaths, died with an estate worth more $11.2 million, the maximum dollar amount that can be passed estate tax-free. (Policy Center).

27% of Millennials spend more money on coffee than what they set aside and invest monthly for their eventual retirement. (Lendedu.com).

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

According to the Mortgage Bankers Association total mortgage application volume fell 2.5 percent last week. Volume was nearly 10 percent lower than a year ago. Purchase applications fell 5 percent for the week and 2 percent annually. Applications to refinance a home loan increased 0.3 from the previous week but were 19 percent lower than a year ago. 

The U.S. Treasury Secretary and the chief trade negotiator are heading to Beijing early next week to further trade talks ahead of the March 1 deadline. While an accord by the end of the month is highly unlikely, an extension to the tariff-truce that began Dec. 1 is. (LPL) 

5-day winning streak. U.S. stocks have shown impressive strength so far this year. The S&P 500 Index just capped its best January in over 30 years, and kicked off February with a 5-day winning streak. (LPL)

Bear market recoveries. U.S. stocks are recovering from the worst slide in seven years, and the S&P 500 has now gone 93 days without a new record high. While it's been a tough waiting game for investors, history shows recoveries from intraday bear markets (what we saw late last year) take time. (LPL)

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

According to the IDC worldwide smart phone volumes declined 4.1% last year to a total of 1.4 billion units shipped.

According to the Institute of Supply Management, its index on manufacturing increased 2.3% in January month over month.

BP's annual profit doubled in 2018 to $12.7 billion, driven by a significant increase in oil and gas output, and the acquisition of the U.S. shale assets from BHP Group. (CNBC)  

If you are in Oregon landlord take note. This week an Oregon Senate committee passed Senate Bill 608. The bill would limit will rent increases at 7% above the cost-of-living. It would also ban no cause evictions. (Oregonian)

Wage inflation is a key indicator we're watching. Last Friday's nonfarm payrolls data showed that hourly earnings rose 3.2% year over year in January, and it has been trending higher over the past year. History shows that average wage growth has topped 4% ahead of recessions. (LPL)

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

Stocks had a great January! The S&P 500 and Dow posted their best January since 1987 and 1989, respectively. Cyclical sectors (communication services, industrials, energy) lead, while defensives (healthcare, utilities) lagged. The good news is that when the S&P 500 gains at least 7% in January, there can be continued follow through, with the final 11 months of the year gaining 11% on average and up five out of six times going back to 1950. (LPL)
 
Earnings season nearing the halfway mark. With 46% of S&P 500 Index companies having reported, fourth quarter earnings growth is tracking to a 15.5% year-over-year increase. Upside has been driven by the energy and industrials sectors, while results for financials and technology have come up short thus far. This week is another busy one with 97 S&P 500 companies slated to report fourth quarter results. (LPL)
 
Vancouver Washington was picked ahead of Seattle and Portland to build the next generation of Army landing craft. Vigor Industrial will create 300 new jobs at the facility. The Army contract is valued at $1 billion. (Oregonian)
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.

The S&P 500 and NASDAQ both posted the best January in 30 years. We start a new month today. (CNBC) 
 
Euro-area gross domestic product (GDP) rose just 0.2% during the fourth quarter, or 1.2% year over year, with Italy falling into recession and Germany, coming very close. Though in line with economists' consensus expectations, tepid GDP growth to end 2018 and soft January data suggests the European Central Bank's GDP growth forecast for 2019 of 1.7% is a reach. 
 
China's manufacturing sector shrank in January for the second straight month. The official China Purchasing Managers' Index (PMI) came in at 49.5. The better news came from the services sector, where the 54.7 reading for January is solidly expansionary.
 
Slow start to earnings season. Earnings growth for the S&P 500 Index is tracking to 14.5%. Estimates for 2019 have fallen by 2% so far, in line with historical averages, and should end the season in the 5% range. 
 
Chicagoans were seeking comfort food amid the freezing weather. Orders for deep-dish pizza in Chicago more than doubled during the polar vortex, which has blasted the Midwest with -66 degree wind chills. (Marketwatch) 
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Troy Reinhart.