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Business News Archives for 2019-04


The S&P 500 reached an all-time high yesterday, but the trading session’s gains were kept in check as investors braced for a busy week including a flurry of corporate earnings reports, economic data and an announcement from the Federal Reserve regarding interest rates.

 

Shares of Google’s parent company Alphabet reported earnings that came up short of expectations as all of its major sales categories performed slightly worse than projected in the first quarter, and yet another big fine out of Europe dinged the company’s earnings.  Google’s parent company reported first-quarter earnings of $6.66 billion, or $9.50 a share, on revenue of $29.48 billion.  Shares of the stock traded lower on the news.

 

Consumer spending surged in March, adding to the sense the economy is on strong footing, while core inflation weakened.  Spending jumped 0.9% in March after a 0.1% gain in February. This was the largest monthly gain in almost ten years.  The closely followed core inflation rate was flat in March, knocking the yearly rate down to 1.6% from 1.7%. This is the lowest rate since September 2017. Personal incomes, meanwhile, increased 0.1% in March and remained on a moderate growth path.

 

One of the nation’s largest homebuilders, D.R. Horton, is doing business in Central Oregon for the first time since 2011.  The Texas-based company bought 49 lots in the Stone Creek neighborhood in southeast Bend and has several homes under construction.  D.R. Horton’s return is noteworthy because the homebuilding scene in Central Oregon is dominated by local companies, though two of them — Hayden Homes and Pahlisch Homes — work in multiple states. 

 

With Northwest Quadrant Wealth Management, I'm Tyler Simones



US Stocks traded higher last week and are at record highs on the back of better-than-expected economic and earnings reports.   This week is the busiest week of first-quarter earnings season, with 150 S&P 500 constituents reporting in the days ahead. 
 
Shares of Disney are trading higher after the Marvel blockbuster “Avengers: Endgame” shattered the record for biggest opening weekend with an estimated $350 million in ticket sales domestically and $1.2 billion globally, reaching a new pinnacle in the blockbuster era that the comic-book studio has come to dominate.    
 
Rates for home loans ticked up slightly, a reminder that the easy-money era for mortgages will likely have to end at some point.  The 30-year fixed-rate mortgage was up three basis points during the week and marked the fourth straight weekly rise for the popular product. The 15-year fixed-rate mortgage averaged 3.64%, up from 3.62%.
Consumer sentiment slipped slightly in April while personal finance outlook hits 15-year high.  The number of people who think their financial prospects for the year ahead will improve has reached the best level since 2004.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones



The US economy kicked off the new year with a bang, overcoming a prolonged government shutdown, trade tensions and a global economic slowdown to deliver first-quarter growth that trounced analysts’ estimates.  Gross domestic product rose at an annualized pace of 3.2% during the first three months of the year, an initial reading from the commerce department showed on Friday, handily topping Wall Street predictions for 2.3% growth. It is also a leg up from the 2.2% pace of expansion recorded during the fourth quarter. (CNBC)

 

Uber is reportedly aiming for an IPO valuation of as much as $90B, seeking to price its shares in the $44-$50 per share range and hoping to raise $8B-$10B. Uber is expected to make the price range public in a filing later this morning, which is likely to also include news of a roughly $500M investment in Uber by PayPal.  PayPal already partners with Uber on processing its fares. (WSJ)

 

Amazon reported first-quarter profit yesterday of $3.6 billion, or $7.09 a share, on sales of $59.7 billion, doubling earnings per share from a year ago.  The company has committed to bringing one-day shipping to its Prime customers, as the company predicted a sharp decrease in operating profit next quarter.  Amazon Web Services, the company’s cloud-computing arm, grew profits nearly 40%.  (Marketwatch)

 

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



Earnings results have been mixed so far this morning, with 3M reporting it missed expectations and plans to shed 2000 jobs globally.  The conglomerate, whose products range from Post-it notes and Magic Tape to the reflective material for road signs, pointed to slowing economic conditions in key markets like China.  On the positive side, Southwest Airlines reported better than expected first-quarter results despite being hit by a plethora of problems during the period — not least the crisis that has led to the grounding of the Boeing 737 Max aircraft. (FT)

 

A slew of earnings are on deck today, including updates from Amazon, Intel ,Starbucks, Ford, Comcast), UPS, AbbVie, and Altria.

 

The business-messaging application Slack plans to make public its prospectus for a direct listing on the stock market as soon as this week, the Wall Street Journal reports. The messaging platform submitted its filing to regulators confidentially in February. The document will show that the company is on track for about $500M in annual revenue this year and that it's unprofitable because it continues to spend money for growth. Expectations will no doubt be buoyed by the performance of similar SaaS companies so far this year. (SA)

 

Turning to the economic data, initial claims for unemployment benefits jumped to 230,000 – the largest increase since September of 2017.  Claims tend to be volatile this time of year due to the Easter holiday and spring break.  Orders for durable goods—products designed to last at least three years, such as computers and machinery—jumped 2.7% in March from the prior month to a seasonally adjusted $258bn.  Through the first three months of 2019, demand for durable products was up 3%, compared with the same period a year earlier. 

 

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



Boeing has revealed it suffered a hit of more than $1bn of revenues from the worldwide grounding of its troubled 737 Max aircraft.  This morning the company withdrew its previous financial guidance for the year because it cannot predict when the Max, its biggest cash generator, will return to service.  First-quarter revenues fell to $11.8bn from $12.9bn last year. Boeing said that reflected lower deliveries of 737 aircraft that were offset by higher margins on other planes.  (FT)

 

AT&T reported a first-quarter revenue miss this morning as its premium TV and streaming service lost subscribers while the telecoms group said it was on track to meet its debt-reduction goals.  The Texas-based company said revenues rose 17.8 per cent from a year ago to $44.8bn, primarily driven by its acquisition of Time Warner.  The company lost 544,000 premium TV subscribers, which brought its total to 22.4m, but phone subscriptions increased by 80,000.  (Alphaville)


The S&P 500 and Nasdaq Composite clocked fresh closing highs on Tuesday, driven by a strong batch of corporate earnings. The S&P 500 ended up 0.9 per cent higher at 2,933.68, nearly 3 points above its previous peak close on September 20, and just off its intraday high. It was a similar story for the Nasdaq, up 1.3 per cent yesterday to 8,120.82, a level that took it past its previous peak close from August last year. (WSJ)

 

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



Stocks ended yesterday’s trading session mixed as investors face a big week for corporate quarterly results and economic data following an extended holiday weekend. Investors were also monitoring a jump in crude-oil prices as the U.S. said it would end waivers for countries that import Iranian crude oil.
 
The Trump administration moved to broaden Iran’s economic isolation on Monday by announcing it would fully enforce sanctions that were imposed last fall and stop allowing five large nations to buy Iranian oil with the ultimate goal of imposing full economic isolation on Iran.  The price of oil jumped 3% on the news. 
 
The number of existing-homes sold dropped nearly 5% in March as the on-again-off-again housing market retreats.  The median price of a home sold in March was $259,400, a 3.8% increase versus a year ago. At the current pace of sales, it would take 3.9 months to exhaust available supply, still well below the long-time average of 6 months.
 
Shares of Kimberly-Clark rose 5.4% after the company reported strong first-quarter earnings. The parent company of Kleenex, Huggies and Kotex reported $1.66 per share versus the expected $1.54 per share.

With Northwest Quadrant Wealth Management, I'm Tyler Simones



Futures are lower after the Easter long weekend that could make today a quiet lull before one of the busiest weeks of the earnings season. Earnings reports before the bell today include Halliburton and Kimberly-Clark, while Whirlpool and Celanese are among those reporting after the close. Big names printing later in the week include Procter & Gamble, Twitter, Facebook, Microsoft, Tesla, Amazon, Ford, and Chevron. (SA)

 

First-quarter revenue at Huawei rose 39 per cent from the previous year to Rmb179.7bn ($26.8bn), an increase that suggests US efforts to persuade countries to ban the Chinese group’s telecoms equipment from their 5G networks have not tempered growth.  Huawei is privately held and the latest figures, the first quarterly numbers it has published, are unaudited. (FT)

 

Shares in railroad stocks are trading near all-time highs after a trio of America’s largest train operators steamrollered earnings forecasts late last week, backed by higher shipping rates.  Union Pacific, CSX and Kansas City Southern cheered investors with first-quarter results that benefited from price hikes and cost efficiencies, which offset the financial impact of disruptive winter storms and record Midwest flooding that caused billions of dollars in damage in the region. (WSJ)

 

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



US Stocks finished the week marginally higher on the heels of a slew of economic reports and earnings season in full swing.  US Markets are closed today in observance of the Good Friday Holiday.

 

The labor market continues to flex its muscle.  The number of people who applied for unemployment benefits in mid-April fell for the fifth week in a row to a nearly 50-year low of 192,000, a remarkably small level of layoffs that gives the economy a sturdy foundation on which it can continue to grow despite recent hiccups.

 

Sales at U.S. retailers surged in March by the most in a year and a half, the latest in a string of reports suggesting the economy is firming up after a soft spell of growth earlier in the year.  Retail sales soared 1.6% last month after slumping in the 1st quarter.


Two big tech IPO’s started trading yesterday on the NYSE and the NASDAQ.  Zoom Video Communications soared over 75% in trading giving the company a value of over $10 Billion.  A year ago, the company was valued at less than $1 Billion in a private funding round.  Shares of Pinterest also soared over 25% in their first day of trading giving them a $10 Billion valuation.  Wall St. is starting to feel frothy.

 

US Markets are closed in observance of the Good Friday Holiday.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones



U.S. stocks closed lower yesterday as the health-care sector slumped on concerns over potential adverse impact from future policy changes. Investors also parsed a steady stream of corporate earnings and the latest snapshot of the economy via the Federal Reserve’s Beige Book.
 
The social media company Pinterest raised $1.43 billion in its IPO yesterday after pricing the offering at $19 a share, valuing the company at $10 billion.  Pinterest, which is expected to start trading today on the New York Stock Exchange, had originally given a pricing range of $15 to $17. But investors appear to be showing an appetite for the social media companies.
 
The National Association of Home Builders’ monthly confidence index rose to 63 in April.  Any reading over 50 signals improving conditions.  Housing analysts remain optimistic about the housing market. Mortgage rates remain low, uncertainty around the 2017 tax law changes is receding, and macro conditions support homeownership for many more Americans.

 

Shares of Pepsi the beverage and snack company rose 3.8% after it beat Wall Street’s estimates in its first-quarter financial report. Pepsi reported earnings per share of 97 cents, while analysts polled by Refinitiv expected a profit of 92 cents.


With Northwest Quadrant Wealth Management, I'm Tyler Simones



The Chinese economy grew at a faster-than-expected rate during the first quarter of this year, after a stall in the escalation of US tariffs, and government stimulus measures began to take hold. The world’s second-largest economy expanded 6.4 per cent in the first quarter, just ahead of expectations. The figure matched the 6.4 per cent growth posted in the final quarter of 2018, but was significantly below last year’s first-quarter growth figure of 6.8 per cent. (FT)

 

Qualcomm shares jumped nearly 7% in after-hours trading after the company came to a settlement with Apple, agreeing to dismiss all litigation worldwide.  Qualcomm is due to receive a significant cash infusion as a result of the settlement.  The companies also reached a six-year license agreement, effective April 1, with two one-year option periods plus a multiyear chipset supply agreement. In a regulatory filing Qualcomm says it expects major revenue growth as shipments ramp up.  (SA)

 

On the earnings front, Netflix beat analyst expectations, but the streaming giant sees slowing subscriber additions, disappointing investors. The company also sees its 2019 free cash flow deficit increasing to $3.5B on higher cash taxes due to its corporate structural change, and additional investments in real estate and content. Netflix still sees free cash flow improving in 2020 and each year afterwards.  IBM also fell in after-hours action after Q1 revenue of $18.2B missed the consensus estimate, as overall revenue fell 5% from a year ago and cloud revenue slipped 2%. 

 

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



U.S. stocks were slightly lower yesterday as investors appeared underwhelmed by earnings from Goldman Sachs and Citigroup as they looked for guidance on the state of the banking sector and the broader economy.
 
American Airlines announced that it will be extending its flight cancellations involving the Boeing 737 MAX aircraft until August 15. The extension would impact about 115 flights per day for American Airlines. This comes on the heels of multiple other airline companies announcing similar cancellations. Southwest will not be flying any Boeing 737 MAX airplanes until at least August 5, and United Airlines has cancelled flights until June 5.
 
Waste Management announced that it would be buying Advanced Disposal Services in a $4.9 billion deal. This purchase is the biggest in nine years for Waste Management. Advanced Disposal Services stock surged 20% in early trade, while Waste Management shares rose 2%.

 

Chevron agreed to purchase Anadarko for more than $47 billion, including debt, in one of the largest deals of the year. Anadarko stock is trading very close to the $62.83 value shareholders will eventually receive from Chevron an indication that investors expect another, higher bid to emerge from Occidental Petroleum bid $70 for Anadarko, about 11% higher than where Anadarko shares currently trade.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones



US Stocks traded higher last week and the S&P 500 crossed the psychological 2,900 mark on Friday, putting the market on track to take back its all-time highs if earnings reports are better-than-expected, and companies provide positive guidance.
 
Vancouver take-and-bake pizza chain Papa Murphy’s sold Thursday for $190 million in cash, a 32 percent premium on the company’s closing share price Wednesday.
The buyer is MTY Food Group, a Canadian chain that owns 75 quick-service and casual dining chains including Baja Fresh, Cold Stone Creamery, TacoTime and TCBY Frozen Yogurt. It had 6,000 locations prior to the Papa Murphy’s deal.
 
Shares of J.P. Morgan Chase surged higher after the banking giant reported first-quarter profit and revenue that rose above expectations.  In contrast shares of Wells Fargo swung to a sharp loss, after the bank lowered its outlook for net interest income, citing an unfavorable rate environment and an increasingly competitive marketplace.
 
Tiger Woods' winning the Masters yesterday was an even bigger win for Nike.  The advertising value of Tigers victory for Nike is roughly $22,540,000, according to Apex Marketing.  Shortly after Woods was declared the winner, Nike dropped a video on its social media channels starring the golfer.  By Sunday afternoon, some of the Tiger Woods-branded apparel and accessories for men on Nike’s website were sold out.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones



Stocks closed near the flatline yesterday as Wall Street looked ahead to the start of the earnings season.


The number of people who applied for unemployment benefits in early April fell below 200,000 for the first time since 1969, the latest sign that a strong labor market remains an island of strength for a slower-growing U.S. economy.  Jobless claims, a rough measure of layoffs, fell by 8,000 to 196,000. 


Uber has officially filed for an initial public offering with the Securities and Exchange Commission, setting up one of the most anticipated Silicon Valley IPOs since Facebook.  Uber did not list a targeted price for shares, putting in a placeholder target of $1 billion for the total amount the San Francisco company seeks to raise. Reports this week stated that Uber expects to raise about $10 billion at a valuation of roughly $100 billion.  It’s reported that 30 banks will underwrite the issue.
 
Georgia-Pacific notified employees at its Coos Bay lumber mill yesterday that it will close the site and lay off all of the facility’s 111 workers.  The Atlanta-based pulp and paper company said Asian competition for Oregon logs made it more expensive to supply the Coos Bay mill. And the company said the prolonged closure of Coos Bay’s swing span railroad bridge made it more difficult to ship products from the site.

 

With Northwest Quadrant Wealth Management, I’m Tyler Simones
 



Stocks ended yesterday’s trading session higher, with the Nasdaq closing at a high for the year.

 

Americans paid more for gas and rent in March, but broader inflationary pressures remained low amid a slowdown in the economy early in the new year.  The consumer price index jumped 0.4% in March to mark the biggest increase in 14 months, according to the government.

 

Rental home price growth is surging higher again, adding fresh urgency to policymakers’ considerations of how to address a worsening affordability crisis.  In March, the cost of rent was 3.7% higher than last year.  That’s the strongest annual growth in a year. What’s more, it’s still growing faster than wages, as average hourly wages grew 3.2% over the same time period.  In the aftermath of the recession, rental costs were subdued. But then household formation began to accelerate as the economy healed – but the housing industry didn’t. The U.S. now has a deficit of about 2.6 million housing units affordable to low- and moderate-income Americans.

 

The leaders of the biggest U.S. banks testified in a 7-hour hearing yesterday and they have a message for Congress: Take a closer look at the ballooning markets for student and corporate loans.  The House Financial Services Committee hearing asked what the banker’s thought were the products or markets that could threaten the U.S. financial system.  They all responded that leveraged lending and student loans, which are growing rapidly and deteriorating very rapidly.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones



U.S. stocks closed lower Tuesday, with the S&P 500 snapping its eight-day winning streak, on fears over escalation of trade tensions with the European Union and a weaker global outlook from the International Monetary Fund.

 

The International Monetary Fund again reduced its global economic growth forecast for 2019, citing risks like increasing trade tensions and tighter monetary policy by the Federal Reserve.  The fund said it expects the world economy to grow by 3.3% this year. That’s down from its previous outlook of 3.5%, which was also a downgrade. The IMF added that it expects the economy to expand by 3.6% in 2020, however.

 

The office of the U.S. Trade Representative threatened to levy tariffs on many European goods. The threat is a retaliation against European companies’ subsidies for aircraft manufacturer Airbus.  If the U.S. follows through, the proposed tariffs would affect about $11 billion in imports to the U.S., including helicopters, bicycles, cheese and wine.

 

The corporate stock buyback binge has reached historic proportions, with repurchases by S&P 500 companies in the last three months of 2018 marking the fourth straight quarterly record high.  Which has never happened before.  Companies continued to spend more of their tax savings on these share repurchases as they boosted earnings through significantly reduced share counts.  Companies in the S&P bought back over $800 Billion worth of their shares in 2018. 
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones



U.S. stocks finished mostly higher yesterday, with the S&P 500 rising for eighth session in a row, as investors geared up for a new earnings season.
 
Warren Buffett has a message for Wells Fargo pick an outsider for the next CEO of the company.  In an interview with the Financial Times, Buffett said whomever the bank chooses will draw immediate scrutiny from regulators and lawmakers.  So, it's "just not smart" to grab a leader from a competitor or from inside the bank.  He wants them to pick someone with no affiliation with Wall St.  Buffett's Berkshire Hathaway owns over 8% of Wells.
 
The owners of Pinterest appear to be taking a cautious approach to their company's Initial Public Offering following Lyft's bumpy first week as a public company.  Launching its investor roadshow today, the online image website priced shares at $15 to $17, significantly below its last funding round, which sold stock at $21.54 and gave Pinterest a valuation of $12B.  The firm is set to begin trading on the NYSE next week under symbol "PINS" as part of a wave of high-profile but unprofitable tech startups that are now moving toward the public market.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones
 



Stocks closed mostly higher yesterday, with the S&P 500 extending its win streak to a sixth session, as investors continued to monitor trade talks between the U.S. and China, which are reportedly in their final stretch.
 
The pace of hiring sped up in March as the U.S. economy added 196,000 jobs, rebounding from a paltry gain in the prior month. The increase in new jobs beat the 172,000 forecast. The jobless rate was unchanged at 3.8%.  The government said 33,000 new jobs were created in February instead of 20,000. January's gain was little changed at 312,000.
 
Surprisingly strong auto sales for March are leading some economists to be more confident in their economic outlook after a rough start to the year.  Motor vehicle sales reached a seasonally adjusted annual rate of 17.45 million in March, up from 16.57 million in February. That’s the highest reading in three months and represents a recovery from a downbeat start to the year. 

The number of people who applied for unemployment benefits at the end of March fell to the lowest level since December 1969, a reassuring sign for the economy amid a bounty of other evidence showing slower growth early in the new year.
 
Northwest Quadrant Wealth Management, I'm Tyler Simones



U.S. stocks followed the lead of global equities, which rallied on a report over progress with trade talks between the U.S. and China.  It appears that ninety percent of the deal with China is done.
 
Employers in the private sector hired 129,000 workers in March, according to the payroll company ADP. That was the weakest showing in 18 months and missed the consensus among economists for job gains of 165,000.
 
Service-oriented companies such as banks, retailers and tech developers expanded in March at the slowest pace in 19 months, but top executives remained “mostly optimistic” about the U.S. economy, a new survey shows.  The ISM non-manufacturing index slipped to 56.1% last month from 59.7% in February, which was among the highest readings in the past decade. Numbers over 50% are viewed as positive for the economy, and anything over 55% is considered exceptional.
 
Oregon’s projected “kicker” tax rebate will decrease by $108 million under a bill passed by Democrats in the state Senate yesterday.  For individual Oregon taxpayers, that would translate to a 14.5 percent reduction to their kicker rebate when they file their taxes in 2020, if state economists’ most recent revenue forecast holds.  In February, economists predicted the kicker could reach $748.5 million. It represents the amount of taxes collected above and beyond what state officials projected they would take in before the start of the two-year state budget cycle.

With Northwest Quadrant Wealth Management, I'm Tyler Simones



Stocks traded near the flatline yesterday as traders look for catalysts that will move markets.


Shares of the pharmacy Walgreens Boots Alliance were on track for their lowest close since 2014 after the company reported fiscal second-quarter earnings that missed expectations and slashed its full-year outlook.  Shares dropped 12% yesterday on the news.  The company CEO called the quarter “the most difficult quarter we have had since the formation of Walgreens Boots Alliance.
 
Shares of Delta Air Lines shot higher, to a 3 1/2-month high, and pulled all of the major airlines stocks higher after the air carrier raised its first-quarter guidance and announced an extension of its credit card pact with American Express. 
 
A key House committee passes the Secure Act, a bill intended to increase the flexibility of 401(k) plans and improve access to the accounts, particularly for small businesses and their employees.  The bill includes a host of provisions aimed at encouraging small businesses to provide private retirement benefits to their workers.  The bill is one of the few proposals with a significant chance of becoming law amid a bitterly divided Congress.

 

With Northwest Quadrant Wealth Management, I'm Tyler Simones



U.S. stocks traded higher yesterday, the first day of the new quarter, as Wall Street scored an apparent boost from better-than-expected economic reports here and in China, momentarily easing fears of flagging economic growth.

 

The Institute for Supply Management’s manufacturing index showed that activity in the manufacturing sector accelerated, coming in at a stronger-than-expected 55.3 in March versus a two-year low of 54.2% a month earlier. A reading above 50 indicates an expansion in activity.


Construction spending climbed 1% in February following a revised 2.5% gain in January, suggesting a rebound in early 2019 after a bout of weakness toward the end of last year.

 

The Lyft IPO is a good example of why retail investors shouldn’t be buying Initial Public Offerings.  Share of Lyft came public last week over $86/share, but are now trading at $68/share showing how institutions sell their shares to the public leaving them holding the bag.
 
with Northwest Quadrant Wealth Management, I'm Tyler Simones


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