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Business News Archives for 2020-10


Both Dow and the S&P 500 notched their third straight weekly gain and the Nasdaq posted a four-week winning streak last week after the release of strong U.S. consumer data.

 

Shares of Boeing are higher after Europe’s aviation regulator has declared Boeing’s 737 Max aircraft safe to fly again after it was grounded in March 2019 following two accidents that left 346 people dead. 


The preliminary reading of consumer sentiment index edged up to 81 this month from 80 in September, according to the University of Michigan. That’s the highest level since March, just when the pandemic slammed the U.S. but the index remains well below levels seen at the start of this year.


More than 6 million households failed to make their rent or mortgage payments in September, according to the Mortgage Bankers Association, a sign that the economic fallout from the pandemic is weighing on jobless Americans as Congress stalls on relief measures.

 

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



Treasury Secretary Steven Mnuchin told House Speaker Nancy Pelosi that the President would weigh in with Senate Republicans if Democrats and the administration agreed a stimulus package. Senate Majority Leader Mitch McConnell rejected that, saying he could not sell a much larger package to his members, and that the Senate would vote on a narrow stimulus plan worth about $500 billion next week. 
 


Wireless communication company Ligado Networks is preparing to pay a whopping 17.5 per cent interest rate in the US bond market this week, the most any company has shelled out to investors since coronavirus struck and the highest rate on any US corporate bond since 2011.  The back-and-forth with investors indicates the scale of financial distress at the Virginia-based company. But it also offers a sign that despite a cramdown in borrowing costs since the Federal Reserve cut benchmark interest rates close to zero, portfolio managers are still showing some discretion in doling out funding.


Morgan Stanley closed out Wall Street’s earnings season on a high, with booming markets driving a 25 per cent increase in third-quarter earnings and fuelling the bank’s calls to be allowed to resume share buybacks. The bank posted net income of $2.7bn for the quarter, far better than predicted by analysts. Revenues of $11.66bn were up 16 per cent year on year.

 

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



Stocks fell for a second straight day yesterday after comments from Treasury Secretary Steven Mnuchin dampened expectations of a coronavirus stimulus deal being reached before the Nov. 3 presidential election.

United Airlines posted a wider-than-expected third quarter loss as the coronavirus pandemic continued to hammer air travel demand, but the carrier trimmed their cash burn.  The Chicago-based carrier swung to a net loss of $1.8 billion in the three months ended Sept. 30, from a $1 billion profit a year ago.


The share of homeowners four months behind on their mortgage payments hit a 21-year high in August, according to the latest figures from CoreLogic.  The 120-day delinquency rate stood at 1.4%, the highest level since CoreLogic started tracking delinquencies in 1999.The rate includes those homeowners who declared forbearance as a result of the CARES ACT.


With people continuing to ditch mass transit during the pandemic, it’s a good time to be in the business of selling cars online.  Car-selling platform Edmunds said that third quarter sales of new cars and trucks rose 31% from the second quarter. Sales from major automakers such as General Motors, Fiat Chrysler and Hyundai all improved markedly in the third quarter from the second quarter.

 

With Northwest Quadrant Wealth Management I’m Tyler Simones



Today’s Apple iPhone event has been labeled a "once in a decade" potential launch, and the stock is responding accordingly. Shares are up 2% premarket, following a 6.4% advance on Monday, amid expectations that it will be the first iPhone with full 5G capacity and cheaper than last year's devices. Analysts are predicting four iPhone models. 


Consumers are already filling up their shopping carts as Amazon's Prime Day kicked off today.  Amazon shares rose 4.8% to $3,442 on Monday in anticipation of the event, pushing the stock up over 85% YTD. Due to the coronavirus pandemic, analysts predict the online shopping bonanza will be the biggest in Amazon's history, with revenue expected to jump about 42% Y/Y to $7.5B, according to JP Morgan.

 

JPMorgan Chase posted earnings that beat analysts’ estimates for the top and bottom lines.  The bank posted third-quarter profit of $9.44 billion.  Rather than building reserves for loan losses, as it had done aggressively in the first half of the year, it actually reduced them by $569 million.  Citigroup also posted earnings significantly beyond analyst expectations.

 

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



The President’s newfound enthusiasm for a large stimulus package does not appear to be enough to get a deal over the line. The administration is blaming House Speaker Nancy Pelosi for a lack of progress while she called the latest offer a "miserable and deadly failure." White House economic adviser Larry Kudlow said a deal is not essential for the economic recovery, and suggested targeted assistance might be enough. Treasury Secretary Steven Mnuchin is expected to continue talks with Pelosi this week knowing that even if they do come to agreement, there is little chance of getting legislation passed by Congress ahead of the election. 

 

Financial earnings will dominate the current week as the sector tries to break out of the malaise that made it an underperformer throughout the summer's recovery rally. Trading revenue and bank credit loss estimates will give an indication of the pace of the economic recovery, though the four largest lenders more than doubled their war chests for defaulted loans over the first six months of the year. Among those reporting over the next few days are JPMorgan Chase, Citigroup, Goldman Sachs, Bank of America, Wells Fargo, and Morgan Stanley. 

 

The EU has been working to make powerful tech companies less powerful, and the bloc is building a list of businesses that are in its crosshairs, FT reports. The "hit list" includes up to 20 of the largest internet companies - based on market share of revenues and the number of users - that will be subject to new and far more stringent rules. New regulations would force them to share data with rivals and make them more transparent on how they collect information. A number of Big Tech names, including Facebook, Apple and Amazon and Google are already under antitrust scrutiny in the U.S., and last week a House subcommittee said Congress should consider breaking up some companies.

 

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



Stocks were higher yesterday as investors grew more hopeful that lawmakers would reach a compromise on a new stimulus deal. Trump’s illness, as well as a weak September jobs report, highlighted the urgency for further coronavirus aid after a months-long stalemate in Washington.


The parent of Regal Cinemas will temporarily shutter their more than 500 U.S. movie theaters this Thursday, as well as its 127 Cineworld and Picturehouse locations in the U.K..  The theater chain made the decision to close its U.S. and U.K. locations because there are not enough blockbuster movies being released to attract attendees during the pandemic.
Oregon’s rural areas have historically had it worst during the state’s economic downturns, with less access to investment, education and other resources that help regions ride out the bad times and build the foundation for a recovery.  The coronavirus recession is unique, though, and it’s playing out quite differently from past downturns – at least in the early stages.  Job losses in southern and eastern Oregon over the past year are roughly half what they have been in the Portland area. In August, the lowest unemployment rate in Oregon wasn’t in one of the state’s prosperous urban centers but rather in tiny Wheeler County in Central Oregon, at just 4.4%.

 

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



U.S. stocks fell in volatile trading on Friday after President Trump’s coronavirus diagnosis fueled concerns about the election and a worsening pandemic. Major averages clawed back some of the steep losses after House Speaker signaled aid for the airline industry could be coming soon, perhaps even as part of a much-anticipated broad relief bill. 


Americans grew more optimistic toward the end of September as consumer sentiment reached a six-month high, reflecting more confidence in the U..S. economy after a summer lull.  The final University of Michigan consumer sentiment survey in September climbed to 80.4.  The index now sits at the highest level since the pandemic erupted in March, mirroring the results of other household surveys. Earlier this week the Conference Board said its consumer confidence index also shot up to a pandemic high.


The index of pending home sales rose 8.8% in August as compared with July, hitting a new all-time high according to the National Association of Realtors.  It’s the fourth consecutive month in which the level of Americans signing contracts to purchase homes has risen. Compared with a year ago, contract signings were up 24%.  Tremendously low mortgage rates — below 3% — have again helped pending home sales climb in August.  Pending home sales increased across the entire country, led by a 13% gain in the West.

 

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



House Democrats passed their $2.2 trillion stimulus plan, which will not progress in the Senate, as talks continue between Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin. While those phone calls and meetings have not produced any breakthrough yet, there remains some small hope of progress as long as they continue. Data released yesterday clearly showed the impact of the ending of the March stimulus plan on incomes, while private economists are cutting their growth forecasts amid the continued failure to find a way forward. (Bloomberg)

 

Nonfarm payroll rose by 661,000 in September and the unemployment rate was 7.9%, the Labor Department said Friday in the final jobs report before the November election.- marking the first time hiring has fallen below the 1M mark since May - the U.S. has regained about half of the 23M jobs it lost since the start of the coronavirus crisis. The unemployment rate has meanwhile fallen far faster than anyone would have dreamed of six months ago, now down from a pandemic high of 14.7%. (CNBC)

 

Crude futures are selling off again this morning, extending losses from yesterday's sharp decline that saw the energy sector sink to a six-month low. Rising coronavirus cases around the world are hurting the demand outlook, with further price pressure from last month's increase in OPEC production. Standard Chartered analysts now expect global demand to fall by 9M bbl/day this year before recovering. (SA)

 

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



The airlines that announced 32,000 job cuts did say that they would reverse the move if the government agrees to additional support in the coming days -- adding more pressure on policy makers to reach an eleventh-hour stimulus deal. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi both said their 90-minute meeting yesterday made progress and House Democrats postponed a vote on the $2.2 trillion package to allow more time for talks. With the House set to leave Washington tomorrow, today's talks are a race against the clock. While the current White House counterproposal is greater than the $1.5 trillion previously touted, Chief of Staff Mark Meadows said any package that "starts with a two" would cause a "real problem."


Due to the ongoing "economic uncertainty from the coronavirus response" and the need for the banking industry to preserve capital, the Fed has extended its ban on share buybacks for the rest of the year. Additionally, dividends will continue to be capped and tied to a formula based on recent income. The decision will apply to banks with more than $100B in assets, and will likely come as a disappoint to lenders like JPMorgan, which had already indicated interest in resuming share repurchases.

 

It's getting dicey over in Europe:  Calling it "the first step in an infringement procedure," the European Union has launched legal proceedings against the United Kingdom for a breach of "good faith" clauses in the Brexit Withdrawal Agreement.  Should the U.K. refuse to drop its Internal Markets Bill, the EU has threatened further legal action, while some say hefty fines or trade sanctions are even on the table.

 

U.S. weekly jobless claims total 837,000, vs 850,000 estimate – these are some of the lowest numbers since March.

 

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


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