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Business News Archives for 2019-12


Stocks fell from their all-time highs as investors took off some risk on the second-to-last trading day of a historic year for equities.


The economy in the Midwest improved in December for the second month in a row, but the region is still suffering from a trade war with China that’s hurt farmers and manufacturers.  The Chicago Purchasing Management Index rose to 49 this month from a revised 46.2 in November. The October reading was the weakest since the end of 2015.


The index of pending home sales increased 1.2% in November from the previous month, according to the National Association of Realtors. In October, sales had fallen after two consecutive months of increases.  The index records transactions that have not yet closed but where a contract has been signed. As a result, the index serves as an indicator for existing-home sales reports in the coming months. Compared with November 2018, contract signings were up 7.4%.
 
Deschutes County outpaced the rest of the State of Oregon in job growth in 2019.  There are 90,000 jobs in the county a 5% increase over last year.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



US Stocks traded higher yet again last week and are on track to have their best year since 1997 with the S&P 500 up 29% year-to-date.


Homebuyers in 2019 faced a tough housing market again, while current homeowners enjoyed another increase in home equity.  A lack of homes for sale, a crowd of potential buyers, and low mortgage rates helped to boost housing prices higher in 2019, the seventh straight year that prices have increased.  Median home prices hovered around $250,000, up more than $11,000, or 5%, versus last year.  The states that saw the most home price appreciation were Massachusetts, Michigan, Illinois, and Texas.


The Secure Act, which was signed earlier this month, changes the way beneficiaries will receive money from inherited retirement accounts.  The new rules say beneficiaries of qualified retirement accounts, such as individual retirement accounts and 401(k) plans, need to withdraw all of the money out of those accounts within 10 years, instead of over their life expectancy as was previously allowed.  There are no required minimum distributions within that time frame, but the account balance must be zero after the 10th year.


President Donald Trump’s strategy to use import tariffs to protect and boost U.S. manufacturers backfired and led to job losses and higher prices, according to a Federal Reserve study released this week.  The Fed found that the tariffs are associated with reductions in manufacturing employment and increases in producer prices.  While the tariffs did reduce competition for some industries in the domestic U.S. market, this was more than offset by the effects of rising input costs and retaliatory tariffs

 

With Northwest Quadrant Wealth Management, I'm Tyler Simones



US Stocks rose to yet another all-time high yesterday as investors looked past the news of President Trump’s impeachment as well as mixed U.S. economic data.


For the first time ever, the U.S. economy started and ended an entire decade without entering a recession.  It’s been the longest expansion in the country’s history.  But overall economic growth during this decade has been slower compared to previous booms.  There’s a saying among economists that “expansions don’t die of old age.”  As of December, the U.S. economy has expanded for a record 126 straight months, the longest time period in the country’s history according to the National Bureau of Economic Research. 


Sales of previously owned U.S. homes declined to a five-month low in November, indicating lean inventories are holding back a residential real estate market that’s been supported by low mortgage rates and job growth.  Contract closings fell 1.7% from the prior month to a 5.35 million annual rate. The median sales price rose 5.4% from a year earlier to $271,300.
 
Nike reported quarterly earnings and revenue that topped expectations, but a miss on gross margin and sales in North America sent shares lower.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



US Stocks traded very close to the flat line yesterday on light trading volume.  Gains were kept in check as investors digested some weaker than expected earnings reports. 

 

The maker of Blue Buffalo Dog Food, Cheerios, and other well know packaged food brands, General Mills is trading higher after the company reported fiscal 2nd quarter profits that beat expectations.  This is the 7th straight earnings beat for General Mills on strong organic growth.  The stock is trading higher on the news and is up 36% YTD.

 

Shares of the embattled utility company PG&E rose 6% after the company said it reached a $13.5 billion settlement with California wildfire victims, and an $11 billion agreement with insurance companies. Last Friday California Governor Gavin Newsom rejected the company’s bankruptcy reorganization plan.

 

In November, Oregon’s unemployment rate dropped below 4 percent for the first time since comparable records dating back to 1976. This puts the rate slightly above the November U.S. rate of 3.5 percent. Oregon’s unemployment rate has been hovering near historical lows of near 4 percent for the past 37 months.
International Stocks:
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.
 



The S&P 500 rose slightly to a fresh an all-time high yesterday and posted its longest winning streak since November.
The House passed a $1.4 trillion spending package yesterday, sending it to the Senate as Congress rushes to prevent a government shutdown.  The chamber easily approved two measures to fund the government through Sept. 30. The Senate needs to pass the legislation — and President Donald Trump has to sign it — by Friday to keep federal departments running.
 
FedEx reported fiscal second quarter results that missed consensus expectations and lowered its profit outlook again amid escalating competition from e-commerce giant Amazon.  Shares of FedEx traded sharply lower on the news.
 
Builders began construction on new homes in the U.S. at a pace of 1.37 million in November. This represented a 3.2% increase from a revised 1.32 million in October and was 13.6% higher than a year ago.  Meanwhile, permitting activity hit yet another post-recession high. Building permits for privately-owned housing units were authorized at a seasonally adjusted rate of 1.48 million. That was 1.4% above the pace of 1.46 million set in October and 11.1% above last year’s rate.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.
 



US Stocks hit record highs yesterday and saw their fourth straight gain as a so-called phase one trade deal between China and the U.S. clears the path higher for Wall Street to end a banner year.

 

Home builders are closing out 2019 more optimistic than they’ve been in decades.  The National Association of Home Builders’ monthly confidence index increased five points to 76 in December from an upwardly revised 71 the month prior. December’s figure represents the highest index reading since June 1999.

 

The US Composite Purchasing Managers Index rose in December, edging up for a second straight month. The improvement signaled the fastest rate of expansion of the combined manufacturing and service sectors since July, driven by the strongest inflows of new business seen over the past five months.

 

The Boeing board is going to temporarily shut down 737 production in Renton, Washington starting in January.  Boeing will keep the 737 MAX assembly lines closed until the Federal Aviation Administration (FAA) clears the jet to return to commercial service, which is currently expected around mid-February or early March.  Shares of Boeing are sharply lower on the news.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



Stocks concluded a solid week of gains after China and the U.S. agreed to a phase one trade deal.
 
While few details have been disclosed, the agreement between the US and China principally seems to involve the U.S. calling off a new round of tariffs that were slated to take effect on Dec. 15 and removing others already in place in exchange for more Chinese purchases of U.S. farm products.  Good news, right? The end of the trade war is nigh? Don’t get your hopes up.  While business leaders in both countries will be temporarily relieved, the underlying tensions between them will not end easily.

 

Sales at U.S. retailers rose slightly in November and mostly benefited a few merchants such as auto dealers and internet stores, suggesting the holiday season got off to a sluggish start.  Retail sales edged up 0.2% last month economists polled had expected a 0.5% increase.

 

Oregon spent half a decade as one of the nation’s hottest housing markets, with home prices soaring by up to 10% annually for much of the stretch from 2013 to 2018.  Now, for the first time since 2012, home prices are rising faster nationally than they are in Oregon.Growth in Oregon home prices dipped below 5% in each of the first two quarters of the year, less than half their growth rate at the end of 2016.The Oregon slowdown reflects a cooling economy and declining population growth as fewer people move into the state. 

 

With Northwest Quadrant Wealth Management, I'm Tyler Simones.



The President signed off on a phase-one trade deal with China, a move that averts the introduction of further tariffs on the Asian nation that were due to come into effect on Sunday. While the terms of the deal have been agreed, the legal text has not yet been formalized, according to people familiar with the matter. There has been no official confirmation from the White House that a deal has been done either, while Chinese media suggest there still may be more work to do. (Bloomberg)

 

Shares of Hertz and Avis dropped sharply on Thursday after ride-sharing company Lyft introduced a car rental service allowing customers to rent a vehicle without having to go to the counter. The service that has no mileage limits, cars can be taken for a day or up to two weeks, and 22 will be set minimum age for a renter. Lyft will also charge the "local market rate" for gas and provide renters with two $20 ride credits to cover the cost of taking a Lyft to and from the rental points. (SA)

 

Boris Johnson has won a crushing victory in the UK general election, paving the way for Britain to leave the EU by the end of next month. Mr Johnson’s Conservative party won its biggest majority in a general election since Margaret Thatcher’s victory in 1987, as traditional Labour voters in the industrial heartlands of the Midlands and north abandoned Jeremy Corbyn’s Labour party. The result breaks years of deadlock at Westminster and gives Mr Johnson a mandate to push ahead with Brexit and take the UK out of the European Union by January 31. (FT)

 

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



A Chinese Ministry of Commerce spokesman said that trade teams from his country and the U.S. remain in close contact as Sunday’s deadline for higher tariffs approaches. Officials from China are expecting a delay to the measure to give more time to reach an interim deal, according to people familiar with the discussions. There may be some news on that later today as President Donald Trump is expected to meet his trade team. (Bloomberg)

 

Traders will get quarterly results after the bell from Adobe, Broadcom and Oracle, which are usually the last to report following the busy earnings season. Robust adoption is anticipated in Adobe's Digital Media Solutions, as well as impressive growth at its Creative Cloud and Document Cloud business lines. Broadcom is meanwhile expected to benefit from the upcoming 5G cycle, but weakness may be seen from recent enterprise networking and storage trends, while Oracle results are likely to reflect solid adoption of cloud-based services. (SA)

 

Saudi Aramco briefly reached a $2tn valuation on its second day of trading on Riyadh’s Tadawul stock exchange. The shares rose 10 per cent — the daily limit — before falling back. Saudi Arabia’s ambitious Crown Prince Mohammed bin Salman has long sought a $2tn valuation for Saudi Aramco, which became the world’s most valuable publicly listed company after its debut yesterday.  (First FT)


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



In the 10 years since the Great Recession ended, the typical Oregonian’s annual income has increased by $2,500. The number of households with annual income of $1 million or more “has risen faster in Oregon than any other state,” with Washington coming in second and Florida third. (Oregon public-policy institute)

 

The U.S. solidified its status as an energy producer by posting the first full month as a net exporter of crude and petroleum products since government records began in 1949. The nation exported 89,000 barrels a day more than it imported in September. (Bloomberg)

 

Potato processors are rushing to buy supplies and ship them across North America in order to keep french fries on the menu after cold, wet weather damaged crops in key producers in the U.S. and Canada. The United Potato Growers of Canada estimates about 18% of their planted area, were left unharvested. The U.S. Department of Agriculture forecasts domestic output will drop 6.1% this year to the lowest since 2010. 

 

Morgan Stanley is cutting roughly 2% of its workforce due to an uncertain global economic outlook, CNBC reported. The job cuts at the investment bank, the world's biggest equities trading firm and a leading mergers advisor, will hit technology and operations roles hardest.

 

Americans are dog and cat crazy. They spent $72 billion on their pets in 2018.



With a new round of U.S. tariffs on China set to kick in at the end of this week, pressure on trade officials is mounting to make sufficient progress in talks to allow that move to be postponed, at least. There have been signs of progress recently, but confusion remains as to how close both sides actually are to reaching a phase-one deal. A Chinese Ministry of Commerce official said the country hopes the talks can produce “satisfactory results.” Adding further impetus to Beijing’s search for a deal is the unexpected drop in the country’s exports last month, with the total to the U.S. down 23% from a year ago. (Bloomberg)

 

In a case slated to start this morning, a coalition of 13 states and the District of Columbia, all led by their attorneys general, will face off against T-Mobile and Sprint over their $26.5B merger. Both the DOJ and the FCC have already allowed the deal to proceed after reaching an agreement with Dish Network which will buy Sprint's prepaid businesses including Boost and Virgin Mobile. The states argue, however, that the regulators erred in their decision, stating the tie-up of the third and fourth largest wireless carrier will limit competition and lead to higher prices. (SA)

 

Wednesday’s Federal Reserve monetary policy decision is not expected to produce any change in policy, with last week’s blowout jobs number backing policymakers’ view that the jobs market in the U.S. remains strong.  There is no data of note for the U.S. economy today. In earnings, Toll Brothers Inc., Thor Industries Inc. and Casey’s General Stores are among the companies reporting. (FT)

 

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



Stocks ended yesterday’s trading session little changed as investors digested employment data while they monitored the latest news from the U.S.-China trade negotiations.

 

The Labor Department reported the US Economy added 260,000 new jobs last month a number that was much better than expected.  This signals that the labor market here in the US remains quite strong even though the economy has slowed a bit.  The unemployment rate also dropped to 3.5% which is a 50 year low.  The only negative in the jobs report was that average wages dropped slightly.


Saudi Arabia has just pulled off the biggest initial public offering in history, raising $25.6 billion by selling shares in its giant state-owned oil monopoly.  Saudi Aramco sold 3 billion shares at 32 riyals in its IPO.   The IPO values Aramco at roughly $1.7 trillion, making it the most valuable publicly traded company in the world ahead of Apple, which is worth about $1.15 trillion.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



U.S. stocks traded higher yesterday following a report that a phase-one trade U.S.-China trade deal was still in the works, contrary to what the President said the day before.

 

Private-sector employment slowed sharply in November, according to payroll processor ADP.  Job growth rose 67,000 in the month., the smallest increase since May. The gain was well below forecasts from economists surveyed who expected a gain of 156,000.

 

The huge service side of the U.S. economy slowed again in November, adding to a slew of evidence pointing to weaker growth toward year end.  The Institute for Supply Management’s survey of service-oriented companies such as hospitals, retailers and restaurants fell to 53.9% in November from 54.7%.  Numbers over 50% are viewed as positive for the economy, but the index has come down sharply from a 13-year high of 60.8% just a little over a year ago.

 

Shares of Googles parent company Alphabet rose over 2% after the company announced it’s co-founders Larry Page and Sergey Brin were stepping down from the company and being replaced by Sundar Pichai who’s been at the company since 2004.

 

With Northwest Quadrant Wealth Management, I'm Tyler Simones.



U.S. Stocks sank for a 3rd straight day yesterday after President Trump suggested he may want to delay a trade deal with China until after the 2020 presidential election.
 
Fannie Mae and Freddie Mac will let mortgage borrowers nationwide take out home loans over $500,000 in 2020.  The Federal Housing Finance Agency said that it will increase the limit on conforming loans, meaning mortgages that adhere to the standards imposed by Fannie Mae and Freddie Mac, to a maximum of $510,400 nationwide. In high-cost areas, the maximum loan limit for mortgages acquired by Fannie Mae and Freddie Mac will be $765,600.

 

American shoppers increased their spending by 16% over the five-day shopping period between Thanksgiving Day and Cyber Monday, according to new data, signaling U.S. consumer confidence hasn’t wavered in the face of global political and economic uncertainty.  190 million shoppers made purchases during the period, a 14% increase over the previous year, showing the US consumer is still healthy.

 

For Medicare’s 61 million or so beneficiaries, Saturday marks the day that their coverage for 2020 is locked in.  The fall enrollment period, which opened Oct. 15 and runs through Dec. 7, is when you can make certain changes to your Medicare coverage, effective Jan. 1.  So, if you want to make changes to your Medicare plan you better do it this week.  If you take no action, you’ll automatically remain enrolled in your 2019 plan.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



Stocks dropped yesterday, the first trading day of December, as investors digested disappointing manufacturing data along with the latest trade news after capping a month that featured blistering gains.
 
Manufacturing activity continued to lag in November amid a decline in inventories and new orders, according to the latest ISM Manufacturing reading released yesterday.  The reading came in at 48.1 vs. an expectation of 49.4.  Any reading below 50 represents a contraction.  This is the 4th straight reading below 50.
 
Outlays for U.S. construction projects fell 0.8% in October at a seasonally adjusted annual rate of $1.29 trillion.  Economists had expected growth of 0.4%. Spending on private construction declined 1%, with residential construction down by 0.9%.
 
According to Salesforce.com, a whopping 76% of digital traffic during the Thanksgiving Day holiday weekend came from mobile devices with 60% of Thanksgiving Day shopping executed on smartphones. And 9% of those orders placed came from products that were clicked or tapped from an algorithmic recommendation, proving that artificial intelligence is gaining traction in directing online traffic.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones.



Stocks closed lower on Friday but the month of November was the best month since June with the market gaining 3.5% last month.
 
The U.S. economy grew at a 2.1% annual pace in the third quarter, a few ticks higher than previously estimated. Gross domestic product was originally estimated to have grown 1.9%. The improved figure stemmed mostly from upward revisions in inventories and investment in structures
 
U.S. consumer spending rose in October for the eighth month in a row, a potentially good sign for the holiday shopping season that got underway after Thanksgiving with Black Friday specials.  Consumer spending increased 0.3% last month which was better than expected.

The index of pending home sales dropped 1.7% in October from the previous month, according to the National Association of Realtors. The decline comes after both August and September saw upticks in pending sales thanks largely to the favorable mortgage rate environment.  The index captures transactions that have not yet closed but where a contract has been signed. As a result, the index is a leading indicator for the existing- and new-home sales reports in the coming months.

 

Black Friday hit a record $7.4 billion in U.S. online sales as many shoppers spent the day clicking instead of lining up to buy. It was the second-biggest U.S. online sales day ever, behind 2018 Cyber Monday’s $7.9 billion.

 

With Northwest Quadrant Wealth Management, I'm Tyler Simones.


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