Stocks were lower last week and are set to open lower again this morning as a rising number of states across the country reimposed social distancing standards to try and curb increases in coronavirus case counts.

Chesapeake Energy, the poster child of the U.S. shale revolution, filed for bankruptcy protection yesterday.  The move comes as the company and industry more broadly has been rocked by a drop in oil and gas prices amid the coronavirus pandemic.  The heavily indebted company has been in trouble for some time, and in May said that it had concerns regarding its long-term viability.  Chesapeake said that $7 billion in debt will be wiped out through the restructuring.
 
As the financial boost from the coronavirus stimulus checks faded in May, so did Americans’ personal income, according to a new government report.  Personal income fell by 4.2% in May, after a record increase in April of 10.5% that was largely because of the stimulus payments that 159 million Americans received. Disposable income also fell by 4.9% after a 12.9% increase in April.

U.S. air-safety regulators are set to begin key flight tests of Boeing Co.’s 737 Max as early as today, with the aim of returning the planes to service around the end of the year, according to a person familiar with the details.  The airborne checks, slated to be conducted in conjunction with Boeing and scheduled to last three days, mark a long-awaited milestone for getting the Max fleet back in the air. The planes have been grounded for 15 months following two accidents that killed 346 people and dealt the biggest blow to the plane maker’s reputation in its 103-year history.

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

The Federal Reserve is putting fresh limits on the U.S. banking industry after annual stress tests found that several institutions could get close to minimum capital levels in scenarios tied to the coronavirus pandemic. Big banks will be required to suspend share buybacks for the third quarter (most of them already paused repurchases in Q2) and limit dividend payments at their current level. While "all large banks remain strongly capitalized," the Fed - for the first time in the decade-long history of the stress test - is requiring banks to resubmit updated capital plans later this year. (Bloomberg)

Shares of the Nike are down nearly 4% premarket on the back of an unexpected quarterly loss and a sales decline of 38% Y/Y. Results were significantly impacted by the closings of stores during global lockdowns, though digital sales soared 75%, representing about 30% of total revenue. Expenses for shipping and returns also put more pressure on Nike's profits - gross margin came in at 37.3% of sales vs. 45.7% a year ago.  (CNBC)

Shares of Albertsons will begin trading this morning on the NYSE, which was shuttered for two months because of the coronavirus pandemic. Existing shareholders raised $800M yesterday, less than anticipated, after the company’s IPO priced at $16 apiece, below its $18-$20 per share target range and valuing Albertsons (ACI) at around $9.3B. Even at that size, the listing will be one of the larger IPOs at the Big Board so far this year. (FT)

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

Dividend-focused bank investors will be paying attention this evening to the first round of the Fed's annual stress tests on the largest U.S. financial institutions; they already paused buybacks for the quarter. Complicating things, the Fed this year will not outrightly "pass" or "fail" banks, making the results even more ambiguous for analysts and investors trying to calculate the health of the industry. The Fed also is expected to provide guidance on how banks would fare if the coronavirus crisis worsens. (FT)

CEC Entertainment, the parent of Chuck E. Cheese and Peter Piper Pizza, has filed for Chapter 11 after the COVID-19 pandemic closed its locations and kept families at home. The current crisis was described as the "most challenging" in the company's history and it intends to use the bankruptcy process to continue talks with stakeholders and landlords to restructure its balance sheet. (CNBC)

German payments company and fintech darling Wirecard has filed for bankruptcy, a week after auditors found a $2B hole in its balance sheet and an admission by the company that the money may never have existed. Shares were suspended from trading before the announcement, but have fallen nearly 90%, wiping out almost $12B of market value since the disclosure last week. CEO Markus Braun was also arrested on suspicion of falsifying accounts at the company, which processes tens of billions of euros in credit and debit transactions every year. (SA)

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

Relations between the U.S. and Europe may become more strained over the summer as the administration weighs new tariffs on $3.1 billion of exports from France, Germany, Spain and the U.K. The move is part of the U.S. response to the most recent ruling in the very long-running fight at the World Trade Organization on aircraft subsidies. EU Trade Commissioner Phil Hogan recently told ministers in the bloc that the U.S. had stepped back from settlement talks, adding that the EU would have little choice but to impose its own sanctions in the absence of further discussions. (Bloomberg)

Companies shoring up cash to survive the global pandemic raised funds in the U.S. high-yield market at the fastest monthly pace ever.  Junk issuers have already sold $46.7 billion of bonds in June, surpassing the prior monthly record of $46.4 billion in September 2013.  Companies have rushed to build cash war chests to see them through the disruption amid the economic slump caused by the pandemic, which triggered a slew of bankruptcies. The Federal Reserve plans to purchase some types of high-yield bonds to boost liquidity spurred by record demand from investors. (FT)

Year to date, the Big 5 tech giants have outperformed the S&P 500's decline of 3.5%. Amazon (NASDAQ:AMZN) is the leader, up 50%, while Microsoft (NASDAQ:MSFT) is ahead by 29%, Apple (NASDAQ:AAPL) is 26% higher, Facebook (FB) is up 19% and Alphabet (GOOG, GOOGL) has climbed 10%. Among the fundamental arguments for the rise has been how these major tech names are insulated from the stay-at-home economic effects.  (SA)

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

US Stocks rose yesterday, building on solid gains from last week, as shares of major tech companies led the way higher on Wall Street helping to propel the NASDAQ to another all-time-high.

Shares of Apple are more than 2% higher, trading at a record high after the company made a slew of announcement at its annual WorldWide Developers Conference. The tech giant unveiled the latest version of iOS, its mobile operating system. Apple also said its new Mac computer will no longer use Intel chips, instead they will use chips they manufacture.

Sales of previously owned homes slid 9.7% in May as the coronavirus pandemic continued to weigh on the U.S. real-estate market.  Existing-home sales occurred at a seasonally adjusted annual pace of 3.91 million, according to the National Association of Realtors. It was the lowest level for existing-home sales since July 2010.  Compared with last year, sales were down 26.6% in May.  Additionally, the median existing-home price last month was $284,600, up 2.3% from May 2019.
Fewer homeowners across the U.S. are pausing their mortgage payments, but whether this trend continues will depend on how smoothly the economy's recovery goes.  As of June 14, only 4.2 million homeowners were in forbearance plans, down from 4.3 million the week prior. It is the first time that figure has decreased since mortgage servicers began offering forbearance to households affected by the coronavirus pandemic, and the resulting business shutdowns.  Under the CARES Act, mortgage servicers were required to provide up to 12 months of relief from mortgage payments to any homeowner with a federally-backed mortgage, including loans backed by Fannie Mae and Freddie Mac.

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

While Facebook and Google have canceled their annual developer conferences, Apple feels the show must go on albeit in a different format. The tech giant's Worldwide Developers Conference will be hosted online today for the first time since it began more than three decades ago. The biggest announcement at the event is likely to be a fundamental shift from Intel-based processors to ARM-based chipsets that will be designed in-house for Mac desktops and laptops.(SA)

US shale companies could be forced to write down at least $300bn of their assets in the second quarter, as operators begin to account for the oil-price collapse on their balance sheets, according to a new study.  The huge impairments — about half the net value of the companies’ property, plant and equipment — would increase the sector’s leverage from 40 per cent to 54 per cent, triggering insolvencies and restructuring, says the study by Deloitte.  (FT)

After "temporarily suspending" imports from U.S. poultry producer Tyson Foods, China ordered a PepsiCo factory to close on Sunday as authorities clamp down on the food industry amid a new coronavirus cluster in Beijing. Two of the eight confirmed COVID-19 cases at the plant were from workers that had made purchases at the Market, where the latest outbreak in the city emerged. The marketplace, which supplies more than 70% of Beijing's fresh produce, has been sealed off, while dozens of communities and schools have been forced to close. (CNBC)

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

Stocks snapped a 3-day win streak yesterday finishing lower as stocks that would benefit the most from an economic reopening struggled throughout the day. 

Construction of new houses rose 4.3% in May as a reopening U.S. economy and ultra-low mortgage rates drew more buyers and encouraged builders to start to speed up work.  Housing starts climbed to an annual rate of 974,000 last month from a five-year low of 934,000 in April. It was the first increase since January.

Federal Reserve Chairman Jerome Powell testified before House members yesterday, noting the central bank will move away from buying corporate bond ETFs in favor of direct corporate-bond purchases, saying “It’s a better tool for supporting liquidity and market functioning.”

J.C. Penney announced it has started its going out of business sale at the 136 stores they are closing, including four in Oregon.  The stores will offer designated shopping hours for at-risk customers, such as senior citizens, on Wednesdays and Fridays from 11 a.m. to noon.  Sales prices will be up to 40% off original prices.  The four Penney’s closing in Oregon are the one here in Bend, McMinnville, Roseburg, and Salem.

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

Stocks were higher yesterday as a record jump in retail sales — coupled with positive trial results from a potential coronavirus treatment and hopes of more stimulus — sent market sentiment soaring.  Stocks of airlines, hotels, cruise lines, and retailers that are tied to the economy reopening all traded sharply higher. 

Sales at U.S. retailers roared back in May as the economy started to reopen and claw its way out of what’s likely to have been the shortest and deepest recession in American history.  Retail sales jumped a record 17.7% last month.  Economists had forecast an 8.5% increase.  The rebound in sales largely reflects the loosening of restrictions on business activity after two months of stay-at-home orders. Along with pentup consumer demand, federal tax payments to families and more generous unemployment benefits also helped stoke higher sales.

The coronavirus pandemic may be far from over, but home builders have a positive outlook on the housing market for the first time since April.  The National Association of Home Builders’ monthly confidence index rose 21 points to a reading of 58 in June.  It’s a marked rebound from April, when the index fell to its lowest level since June 2012.  Inventory is tight, mortgage applications are increasing, interest rates are low, and buyer traffic more than doubled in one month.  Any reading over 50 indicates improving confidence.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

US Stocks staged a big comeback yesterday to finish higher after trading 2.5% lower earlier in the day as the Federal Reserve said it would start buying individual corporate bonds, reiterating the point that you can’t fight the Fed.

 Stocks of companies benefiting from employees working from home continue to trade higher led by Zoom who’s shares are 9% higher at an all-time-high, after a survey of 500 tech executives said that 47% of their employees will work from home in the future.

Walmart announced a new partnership with e-commerce shopping platform, Shopify, now used by over 1 million businesses. The deal will open Walmart’s Marketplace to Shopify’s small business sellers, with the goal of bringing 1,200 Shopify sellers to the marketplace this year. The partnership will greatly expand the reach of the participating brands by placing them in front of Walmart Marketplace’s 120 million monthly visitors.  The partnership is a direct shot at Amazon, which responded by promising third-party sellers the ability to reach their 300 million customers worldwide.

Mortgage giants Fannie Mae and Freddie Mac said they had hired major Wall Street firms to advise them on raising fresh capital as they move to exit government control.  The moves are the latest in the yearslong effort to return the mortgage companies to private ownership after they were bailed out by the government during the financial crisis.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

US Stocks are set to open lower this morning following a big pullback last week triggered by rising fears of a resurgence in the virus as well as investors’ profit-taking after the massive comeback.  US Stocks were 5% lower last week their worst week since March 20th.

U.S. consumer sentiment climbed in early June by the most since 2016 as more states began to reopen their economies and employers restored jobs.  The University of Michigan’s consumer sentiment index increased 6.6 points. Even with the improvement, the gauge remains well below pre-pandemic levels.

Industrial components manufacturer Precision Castparts says they permanently eliminated 717 jobs in Portland and Clackamas county this Spring.  Precision Castparts is a big supplier to the aerospace industry.

24 Hour Fitness has permanently closed 100 locations, and about a third of those locations are in California.  The company is seeking financing to stay afloat during a Chapter 11 bankruptcy filing.  Prior to the closing 24 Hour Fitness had more than 400 gyms in 14 states with 22,000 employees.

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

One of the more curious bankruptcies in recent memory just got a little odder with word that Hertz wants to sell up to $1B in shares following a sizable rally (a court ruling could come today). "The recent market prices and the trading volumes in Hertz’s common stock present a unique opportunity for the company to raise capital on more favorable terms than the strings-attached loans that many other bankrupt companies get," stated Hertz attorneys on the strategy. Hertz has been extremely popular among armchair investors over the last few weeks, with twice as many buyers snapping up shares than in Amazon or Microsoft. (CNBC)

Boeing's 16% drop yesterday contributed more than 230 points of the Dow Jones' 1,700-pont plunge as the plane-maker cut production plans for the 737 MAX just two weeks after restarting work in its Seattle-area factory. Key supplier Spirit AeroSystems, which was asked by Boeing to cut production on the MAX, and other suppliers also traded deep in the red. Less production in 2020 could mean the MAX timeline is slipping again or Boeing will deliver MAX jets at a slower rate than previously expected. (SA)

Quicken Loans, the largest mortgage lender in America, has filed to list on the stock market in what could be the biggest initial public offering of the year, following a recent run of flotations.  The Detroit-based mortgage powerhouse has filed confidentially with the US securities regulator, said people with direct knowledge of the plans, and a listing could come as soon as next month. (FT)

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

The Fed will release its first quarterly forecasts since December along with the latest monetary policy decision at 2:00 p.m. Eastern Time today. The Fed is all but certain to keep interest rates in a zero to 0.25% target range and signal it is not yet ready to exit emergency policies introduced to keep credit flowing during the pandemic. Last week's surprising payrolls numbers are unlikely to see any major change to the outlook yet, with economists surveyed by Bloomberg not seeing a hike in rates until 2022. The announcement will be followed by a press conference with Fed Chairman Jerome Powell. (Bloomberg)

The OECD this morning released its latest forecasts for the global economy which make for grim reading. The organization emphasized the need to maintain stimulus measures as it predicts a 6% slump in global economic activity this year, or a 7.6% contraction if there is a second wave of the virus. It also warned that any recovery would be uneven, echoing sentiments from the World Bank earlier this week. The cautious approach to stimulus withdrawal is at odds with some lawmakers who are now questioning the need for more help for the U.S. economy. (OECD)

Tiffany has reached an agreement with lenders to amend its debt covenants, further complicating the ability of luxury conglomerate LVMH to renegotiate a deal it struck before the pandemic to buy the US jeweller for $16.5bn  The conglomerate offered a 37 per cent premium to Tiffany's market value, but is now desperately looking for a way out of the deal.  (FT)

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

The round trip has been completed. The fastest stock market collapse on record has been followed by one of the fastest recoveries ever, powered by unprecedented amounts of stimulus injected into financial markets and the economy, from both the Federal Reserve and Congress. The S&P 500 closed in the green yesterday, the day record-keepers declared the U.S. is in recession, and made whole anyone who has held stocks all year. Only one goal is left for the main benchmark for American equities: its record high from before the pandemic hit. (Bloomberg)
 
Shares of Chesapeake Energy tumbled 42% in extended trading on Monday following reports that the natural-gas producer was preparing to file for bankruptcy. The owner of Men's Wearhouse and Jos. A. Bank, Tailored Brands, also fell nearly 5% on similar reports. On the flip side, Macy's soared 13% AH upon securing $4.5B in new financing, while Hertz erased all the losses suffered since the car rental company declared bankruptcy on May 22, which is quite a perplexing rally as equity holders are likely to be wiped out during bankruptcy proceedings. (SA)
 
The peak in monthly economic activity in the U.S. occurred in February, according to the National Bureau of Economic Research - the group that gets the honor of anointing expansions and recessions. The expected duration of the downturn is a matter of debate and is likely to influence opinions on the need for additional economic relief. Congress has already provided $3.3T in emergency spending and tax breaks, prompting worries about a ballooning budget deficit. (CNBC)
 
With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

Two drugmakers at the forefront of the industry's efforts to fight the novel coronavirus are exploring a combined future. AstraZeneca, co-developer of one of the fastest-moving experimental coronavirus vaccines, has made a preliminary approach to Gilead Sciences, the only company to have received FDA emergency authorization for its COVID-19 treatment remdesivir. Formal talks are not yet underway, but if combined, the two companies would have a market capitalization of $232B, based on today’s opening share prices. (SA)

Americans under lockdown have spent billions of dollars on DIY beauty products as the closure of hairdressers and nail salons spurs amateur cosmetology.  Clippers, hair dyes and nail polish are among a wide range of related items whose sales surged both online and in those stores that have remained open in the 12 weeks since the start of March, according to figures from data provider Nielsen.  Overall US health and beauty sales in the period rose by $3.74bn, or 13 per cent, from a year ago to $32.2bn. (FT)

OPEC+ agreed to a one-month extension to the production cuts introduced to counter the pandemic-led oil price crash. There was also agreement on a stricter approach to monitoring member production to control the "Pinocchio" problem -- where some states were pumping far more oil than allowed. Crude investors welcomed the deal, pushing Brent above $43 a barrel this morning, while West Texas Intermediate traded around $40. Saudi Arabia was quick to increase prices to its customers in some of the biggest hikes in two decades.  (Bloomberg)

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

Stocks were lower yesterday, giving back some of the strong gains for June, as Wall Street grappled with disappointing jobs data and a late-day sell-off in tech shares. 

In a huge surprise the US economy actually added 2.5 million jobs last month and the unemployment rate fell according to the Bureau of Labor.  Economists had predicted there would be 7+ million jobs lost.  The unemployment rate dipped to 13.3% from 14.7%. 

 Retailers, restaurants and other service-oriented companies began to recover from the pandemic in May, according to a new survey, but business is still extremely slow and points to a U.S. economy still in a deep recession.  The Institute for Supply Management’s survey of nonmanufacturing companies was 45.4% in May from 41.8% in April. The April reading was the lowest ever.

The Vancouver WA based marketing data broker ZoomInfo raised more than $900 million in its initial public offering yesterday, the region’s biggest IPO ever.  Shares shot up 70% at the start of trading to $36, giving ZoomInfo a market value of more than $14 billion. That makes it the second-most valuable company based in the Portland area, trailing only Nike.
 
 With Northwest Quadrant Wealth Management, I’m Tyler Simones

Stocks jumped yesterday as Wall Street focuses on the economy reopening, S&P 500 is now up 40% from March low.  Banks, airlines, and hotels all stocks tied to the reopening of states outperformed once again.

Video chat software giant Zoom announced their earnings, beating expectations and giving investors and analysts their first look at how much growth the company has experienced as a result of the coronavirus pandemic and ensuing lockdowns.  Zoom has been among the biggest beneficiaries, if you can call it that, of the pandemic. The lockdowns, forced people to gather in front of their laptops, smartphones, and tablets to stay in contact with friends and loved ones, work from home, and attend virtual classes.  Zoom saw their revenue jump a whopping 169% year-over-year.

May U.S. auto sales rate was 12.17 million vehicles which was better than the 11.7 million analysts expected.

Wells Fargo, one of the biggest lenders for new and used car purchases in the U.S., sent letters to hundreds of independent auto dealerships last month telling them that the San Francisco-based company was dropping them as a customer, according to people with knowledge of the situation.
  
With Northwest Quadrant Wealth Management, I’m Tyler Simones

U.S. stocks rose yesterday to start off the new month amid increasing hope of a successful reopening of the economy. Those gains come after back-to-back monthly increases for stocks. 

Stocks closely linked to the economy reopening led the gains. Carnival, Norwegian, and Royal Caribbean were all up at least 7%. Hilton and Marriott International advanced 7.5%, and American, Delta, and United traded sharply higher.

American manufacturers are still struggling mightily from coronavirus-related shutdowns and the damage to global trade, but they showed faint signs of revival in May as most states loosened restrictions and people began returning to work.  The Institute for Supply Management said its manufacturing index climbed to 43.1% last month from an 11-year low of 41.5% in April, suggesting the worst of the economic damage from the pandemic might be over.

The Commerce Department reported that spending for U.S. construction projects dropped a smaller than expected 2.9% in April. Analysts polled had forecast a 6.8% plunge due to the coronavirus pandemic. Residential construction sank 4.5% in April, but spending on construction projects outside the housing sector fell a much smaller 1.8%. Yet economists still expect construction spending to weaken since so many projects were planned before COVID-19 devastated the economy. Outlays are likely to soften further in June.

With Northwest Quadrant Wealth Management, I'm Tyler Simones

American retailers already hit by the coronavirus pandemic have shuttered stores nationwide as violent protests included looting in many U.S. cities. Target, Walmart, Apple, Nike, Nordstrom and Whole Foods closed hundreds of locations and adjusted store hours to accommodate citywide curfews. U.S. retail sales already posted record declines due to COVID-19, putting the economy on track for its biggest contraction since the Great Depression. (SA)

Nineteen hours after SpaceX's Falcon 9 rocket lifted off Saturday from Florida on a historic voyage, the Crew Dragon capsule docked with the International Space Station. It was the first-ever private spacecraft to attain orbit with people on board and marks the final test flight before the company begins flying astronauts every few months. SpaceX competitor Boeing even congratulated the company, saying the mission to the ISS "marked a new era in human spaceflight. (CNBC)

Chinese government officials told major state-run agricultural companies to pause purchases of some American farm goods including soybeans as Beijing evaluates escalating tensions with the U.S. over Hong Kong as the US is looking into eliminating the policy exemptions that allow America to treat Hong Kong differently from the mainland. Trade War round 2?  Stay Tuned.

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