U.S. stocks fell again yesterday as major technology stocks came under pressure again after the 10-year Treasury bond yield touched its highest level since January 2020.
The S&P Case-Shiller 20 city home price index increased 11.2% over last year. That year over year gain was the largest since they began keeping records nationally. Phoenix, Seattle, and San Diego saw the largest gains. The median price for a house in the US is now $350,000.
According to the Conference Board the consumer confidence index is now at 109.7, up considerably from the February reading of 90.4 and at its highest level since the onset of the pandemic in March of 2020. Consumers' renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items. However, concerns of inflation in the short term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead.
The Oregon Legislature is moving to wipe out more than $300 million in state taxes triggered by federal stimulus payments, but it could take several months for 900,000 taxpayers to get all the money back.
U.S. stocks fluctuated on both sides of the flat line yesterday amid weakness in bank stocks caught in the downdraft of Friday’s margin call of the big hedge fund Archegos, as investors assessed the ripple effect from the forced block sells.
The CDC has extended the national ban on evictions through the end of June. The eviction ban was scheduled to expire in two days, and advocates warned of a spike in evictions without an extension. About 20% of adult renters said they didn’t pay last month’s rent. This is putting a squeeze on smaller landlords, who are unable to directly access Covid rental relief funds, and some are starting to sell properties to recoup losses. This will likely reduce the much-needed, affordable rental stock in an already unaffordable housing market.
Shares of Boeing traded higher after Southwest Airlines announced they agreed to buy 100 of Boeing’s 737 Max 7 planes as they plan to retire older jets, sticking with the manufacturer that has been the backbone of its fleet for 50 years. Southwest, which operates an all-Boeing 737 fleet, said its order, the largest Max sale since two crashes caused a worldwide grounding in March 2019, is a vote of confidence in the planes.
US Stocks finished a volatile trading week last week to close at record highs.
This week investors are awaiting updates from President Biden about his infrastructure plan which could cost more that $3 trillion. The president is expected to unveil his plan when he travels to Pittsburgh on Wednesday. White House press secretary Jen Psaki said Sunday Biden plans to roll out two packages in the coming months, the first covering infrastructure and the second covering health and family care.
U.S. consumer sentiment continued to improve in late March to a one-year high as more Americans got vaccinations and business restrictions eased in many states. The University of Michigan’s final sentiment index increased to 85.
Six straight weeks of increases have put the 30-year fixed-rate mortgage at its highest level in nine months. According to Freddie Mac, the 30-year fixed-rate average jumped to 3.17 percent. It was 3.09 percent a week ago and 3.5 percent a year ago. The 30-year fixed-rate average hasn’t been this high since June. The 15-year fixed-rate mortgage has also risen for 6 straight weeks and stands at 2.45 percent.
The ship that has completely blocked the Suez Canal remains stuck in place. While operations to free the channel continue today, the best chance to move the vessel may not come until Sunday or Monday when the tides are highest. The blockage is halting $9.6 billion a day of traffic, and the knock-on effects of closing one of the world's most important transit points is likely to worsen for ships carrying everything from crude oil to cement to live animals.
First-time claims for unemployment insurance unexpectedly fell sharply last week amid signs that hiring has picked up in the U.S. economy, the Labor Department reported Thursday. Claims totaled 684,000 for the week ended March 20, the first time the number has been below 700,000 during the Covid-19 era. The level was a substantial decline from the 781,000 from a week earlier and was the lowest since March 14, 2020, just as the pandemic had begun.
Fresh concerns about companies from China being kicked off American exchanges have helped push an index of U.S.-traded Chinese stocks into bear-market territory. The S&P/BNY Mellon China Select ADR Index tracks the American depositary receipts for 48 major U.S.-listed Chinese companies. The technology-heavy gauge includes e-commerce companies Alibaba Group BABA Holding Ltd. and JD.com Inc., JD and electric-car maker Nio Inc. The benchmark tumbled 6.4% Wednesday, leaving it 23% below a record hit on Feb. 16. Chinese tech stocks are partly struggling because of the threat of delisting, as well as heightened regulatory risk at home.
Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell are set to face lawmakers in Congress for two days of hearings starting at 9am PST. Yellen is likely to push the case for more spending, repeating her argument that the U.S. has a lot of room for borrowing with interest rates so low. Yellen will be closely questioned on the administration's spending plans today as President Joe Biden's advisors are set to present him with a new infrastructure-heavy spending plan that could reach $3 trillion. In his prepared testimony Powell said that while the economic recovery is progressing well, it is still far from complete and so the Fed will continue to provide support.
Discord, a social media company popular with gamers, has held deal talks with Microsoft for a transaction that could top $10 billion, according to people briefed on the situation. Many of Microsoft’s acquisitions in recent years have focused on online communities, such as its purchases of LinkedIn, GitHub, and the gaming developer that created Minecraft. Last summer, Microsoft was in talks to buy the video app TikTok in what would have been a blockbuster acquisition; the discussions later fell apart. In September, Microsoft also bought ZeniMax Media, the parent company of several large gaming studios, for $7.5 billion.
AstraZeneca’s US clinical trial of its Covid-19 vaccine developed with Oxford university has shown 79 per cent efficacy at preventing symptomatic disease and 100 per cent efficacy against severe or critical disease and hospitalisation. The results are similar to those from other Covid-19 vaccines made by Pfizer and Moderna, said Sarah Gilbert, professor of vaccinology at Oxford and co-designer of the vaccine. A fifth of the participants in the AstraZeneca trial were over 65 and the jab showed 80 per cent efficacy in these older participants.
Yesterday afternoon the Federal Reserve sharply ramped up their expectations for economic growth here in the US and indicated that there are no interest rate hikes likely through 2023 despite an improving outlook and a turn this year to higher inflation. As widely expected, the policymaking Federal Open Market Committee also voted to keep short-term borrowing rates near zero, while continuing an asset purchase program in which the central bank buys at least $120 billion of bonds a month.
Taxpayers will have more time to get their taxes in order this year. The IRS is planning to push back the deadline for filing tax returns by about one month, from the usual April 15 to May 17th. This will give taxpayers additional time to file their 2020 tax returns and pay any amounts owed to the IRS.
U.S. homebuilding dropped to a six-month low in February as severe cold gripped many parts of the country, in a temporary setback for a housing market that remains supported by extremely lean inventories amid strong demand for larger homes. The report from the Commerce Department also showed a sharp decline in building permits last month.
The National Association of Home Builders’ monthly confidence index dropped two points to a reading of 82 in March. This was the index’s lowest reading since August. Index readings over 50 are a sign of improving confidence. The index had fallen below 50 in April and May in the immediate wake of the onset of the pandemic. Builder confidence peaked at a level of 90 last November and has trended lower as housing affordability has declined.
Industrial output fell sharply in February as severe winter storms battered much of the country, disrupting a wide range of manufacturing activities from autos to chemical plants. The expectation is that the drop will be temporary although there are concerns about growing global supply chain problems. The Federal Reserve reported Tuesday that industrial production fell 2.2% in February, reflecting a big decline in output at factories and oil and gas refineries.
Oregon added 13,900 jobs last month, nearly twice as many as it gained in January, but the jobless rate remains stubbornly high. Unemployment was 6.1% in February, according to new data from the Oregon Employment Department. That’s on par with the national rate and down just a tenth of a percentage point from January. While the jobless rate has fallen for 10 straight months, the rate of improvement has slowed to a crawl over the past three months.
US Stocks were higher again yesterday notching their 14th all-time-high in 2021 as shares of Big Tech companies and economic reopening plays like airlines led the major averages higher as the coronavirus vaccine rollout continues.
U.S. airline executives are pointing to concrete signs of domestic leisure travel recovering as a slowing pandemic drives spring and summer bookings, pushing airline stocks to their highest level since the coronavirus crisis hit the sector a year ago. United Airlines expects to halt their cash burn by the end of March, the first major carrier to say it could hit the industry’s milestone. The Dow Jones Airline Index rose 5% on the news.
Tesla has added “Technoking of Tesla” to billionaire Chief Executive Officer Elon Musk’s list of official titles, in a regulatory filing that also named the companies CFO Zachary Kirkhorn “Master of Coin.”The electric-car maker did not explain the reasons for the cryptic new titles. Musk also shared a new electronic music track about a non-fungible token, or NFT - a new type of digital asset that is authenticated by blockchain.
US Stocks jumped to another record high last week as rising reopening optimism continued to encourage the rotation into cyclical stocks. Meanwhile, surging bond yields rekindled valuation fears and took the comeback momentum out of tech stocks.
According to the Labor Department the producer price index rose 0.5% in February. The gain was in line with the forecast of economists surveyed by the Wall Street Journal. Wholesale inflation jumped 1.3% in January, the biggest gain since 2009.
The Federal Reserve’s latest snapshot of U.S. household wealth showed that the rich got richer during the pandemic, contributing to a record combined household wealth of $130.2 trillion in the fourth quarter of 2020. Personal checking and savings accounts and money-market funds rose by $2.67 trillion to $16.5 trillion in 2020, even though yields were close to zero. Consumers also paid off a record $118.3 billion in credit card debt. The top 1 percent of U.S. households owned more than 30 percent of the wealth, by comparison, the bottom 50 percent owned just 2 percent of household wealth.
The gap between the vaccine haves and have-not nations is set to widen after Joe Biden doubled the U.S. order of Johnson & Johnson’s single-shot treatment. The U.S. president faces a tough balancing act of meeting domestic needs and sharing with more needy allies. For now Biden said he needs to put Americans first while acknowledging that no one is safe until everyone is. Moderna Inc. has said its U.S. production is entirely for domestic use. Pfizer Inc. and J&J have declined to say whether they’ve exported any U.S.-produced doses or plan to. Meanwhile, Europe's slow vaccine take-up is causing investor alarm and outflows.
American Airlines has sealed the first portion of its industry-record $10bn debt deal that highlights the extent to which investors are searching for income even in sectors badly hit by the pandemic. The Texas-based airline issued $6.5bn worth of junk bonds on Wednesday as part of a package that also includes $3.5bn in loans. The $10bn fundraising marks the biggest debt deal ever by an airline, beating Delta's $9bn bond and loan sale in September.
With the House and Senate both approving the $1.9 trillion coronavirus relief bill, the only thing separating Americans from a $1,400 stimulus checkis a signature from President Joe Biden. The American Rescue Plan Act is expected to be signed by President Biden on Friday, and stimulus payments could start being sent out within days of him signing. That means Americans could start seeing the money as early as next week.
The US Senate has voted to approve $1.9tn in stimulus legislation, taking the president’s plan to stoke America’s economic recovery a big step closer to its final passage in Congress but sending another jolt through financial markets. The upper chamber of Congress passed the fiscal stimulus legislation by 50 to 49, following party lines with all Democrats voting in favour and all Republicans present opposing.
President Joe Biden’s $1.9 trillion package will easily pass a vote in the House after it is taken up tomorrow, according to leading Democrats. Economists have already factored the mammoth spending bill into their calculations for the year, with Goldman Sachs Group Inc. seeing the unemployment rate tumbling to 4.2% by year end. Should everything go smoothly in the House, Biden will sign the measures into law before the aid from the previous package runs out on March 14.
Besides a broader correction that has weighed on tech stocks in recent weeks, the halo of the electric vehicle sector has been fading. That can be clearly seen with poster EV maker Tesla (NASDAQ:TSLA), whose shares are down nearly another 6% in premarket trade to $560. The company led by Elon Musk has seen its shares fall from an intraday high of $900.40 at the end of January to a low of $539.49 on Friday, marking a 40% plungeover the course of six weeks.
U.S. stocks fell sharply yesterday after Federal Reserve Chair Jerome Powell failed to reassure investors that the central bank would keep surging bond yields and inflation expectations in check. With yesterday’s steep sell-off, the Nasdaq turned negative on the year.
The US Economy added 379,000 jobs in February, well above the 210,000 economists had predicted. The unemployment rate also dropped slightly to 6.2% from 6.3%. The better than expected jobs report is pushing bond yields higher, with the yield on the 10 year Treasury Bond now above 1.6%.
New orders for U.S.-made goods increased more than expected in January, pointing to a sustained recovery in manufacturing even as the pace of business spending on equipment is slowing. The Commerce Department said that factory orders shot up 2.6% after rising 1.6% in December. Manufacturing, which accounts for 12% of the U.S. economy, has been driven by strong demand for goods, like electronics and furniture as 23.2% of the labor force works from home because of the virus.
Drugmaker Merck will help produce rival Johnson & Johnson’s newly approved coronavirus vaccine in an effort to expand supply more quickly. The announcement comes as the White House looks to speed the production of the single-dose vaccine and accelerate the nation’s plans to vaccinate nearly all adult Americans in the coming months. Officials have said J&J faced unexpected production issues with its vaccine and produced only 3.9 million doses ahead of its receiving emergency use authorization last Saturday. The company has promised to deliver 100 million doses by the end of June and this partnership will increase their odds of success.
Target’s earnings topped Wall Street’s estimates, as its sales got a lift from a strong holiday season and store traffic picked up in January. The big-box retailer has benefited during the pandemic as shoppers look for easy and safe ways to buy groceries and other items. Its 2020 sales grew by more than $15 billion — greater than its total sales growth over the prior 11 years.
Oregon small business owners who have struggled to pay their rent during the coronavirus pandemic can apply for help from the state beginning Monday, March 8. Small business owners with 100 or fewer employees will be able to apply together with their landlords for money to cover outstanding rent through the state’s new $100 million commercial rent relief program.
U.S. stocks started the month of March sharply higher yesterday in a broad-based rally as stocks tied to the economic reopening jumped on vaccine optimism, while tech names rebounded from steep losses last week.
U.S. manufacturing expanded in February at the fastest pace in three years and a gauge of materials costs accelerated the most since 2008 as supply shortages challenge the manufacturing industry. According to the Institute for Supply Management a gauge of factory activity increased to 60.8 from 58.7 a month earlier. Readings above 50 indicate expansion and the figure exceeded the 58.9 median estimate from economists.
U.S. construction spending reached the highest level on record last month as both local and federal governments began loosening the purse strings. Spending hit a seasonally adjusted rate of $1.5 trillion across all sectors last month, the highest recorded since the Census Bureau began tracking this figure in 2002. Homebuilding was largely responsible for the surge, but there was also an uptick in public and private non-housing-related construction.
US Stocks ended the month of February lower as investors worry about rising interest rates and the effect they will have on high flying tech stocks. The tech heavy NASDAQ suffered its worst week since October last week.
Americans increased spending in January for the first time in three months after the government sent $600 stimulus checks to families and boosted unemployment benefits as part of an effort to shore up the economy. Consumer spending jumped 2.4% last month, marking the biggest increase since last June.
Central Oregon’s economy appeared resilient in the fourth quarter of 2020, despite a pandemic that required businesses to shutter temporarily, according to the quarterly Central Oregon Business Index from Tim Duy at the University of Oregon. The index was 136.7 in the fourth quarter of 2020, creeping up slightly from the third quarter, Duy said. Jobs losses continued to drag on the economy, especially in the fourth quarter when Gov. Kate Brown closed restaurant businesses and limited the number of people who could gather, Duy said. But housing and lodging taxes were bright signposts indicating a full economic recovery could be ahead.