U.S. stocks climbed to record levels yesterday after key companies reported strong earnings and fresh economic data pointed to a rebound in consumer spending.
Manufacturing remains a bright spot in the US economy as the Manufacturing gains in March were broad based. U.S. industrial production rose 1.4% in March, after a revised 2.6% fall in the prior month that was caused by severe winter weather. Production was held down by a steep decline in output from power utilities, as weather switched from unseasonably cold to unseasonably warm. Manufacturing output rose 2.7% in March after a 3.7% decline in the prior month.
The number of Americans applying for unemployment benefits tumbled last week to 576,000, a post-COVID low and a hopeful sign that layoffs are easing as the economy recovers from the recession. The Labor Department said that applications fell by 193,000 from 769,000 a week earlier. Jobless claims are now down sharply from a peak of 900,000 in early January. New jobless claims declined in Oregon, too, but at a much slower rate. Nearly 7,900 Oregonians filed new applications last week, down from more than 9,000 in each of the prior two weeks.
Stocks are higher again this morning after the Commerce Department Report that showed retail sales surged 9.8% in March as additional stimulus sent consumer spending soaring.
The cost of imports surged in March for the fourth month in a row and added to growing inflationary pressures in the U.S., as a resurgent economy spawns strong demand for a host of goods ranging from lumber to computer chips to new cars. The import price index leaped 1.2% in last month. The cost of imports began to surge at the end of last year. Rising oil prices were the chief cause at first, but now the prices of many goods and services are increasing as demand rebounds and supplies fail to keep up.
Shares of Goldman Sachs, JP Morgan, Wells Fargo, and Bank of America all traded sharply higher as all three banks reported earnings that were higher than expected. Bank stocks have risen sharply so far this year, with the S&P 500 financials sector gaining nearly 20%, easily outpacing the S&P 500.
Consumer prices were higher in March, given a boost by a strong economic recovery and year-over-year comparisons to a time when the pandemic was about to throttle the U.S. economy. The consumer price index rose 0.6% from the previous month but 2.6% from the same period a year ago. The year-over-year gain is the highest since August 2018. Gasoline prices were the biggest contributor to the monthly gain, surging 9.1% in March and responsible for about half the overall CPI increase. Gasoline is up 22.5% from a year ago.
Optimism among small-business owners in the U.S. continued to rise in March on the back of the passage of the American Rescue Plan and the easing of Covid restrictions in many states. The NFIB Small Business Optimism Index came in at 98.2 in March, up 2.4 points from the previous month. March posts the second straight month of increases for the index. However, it is still below the 104.5 level registered in February 2020, before the pandemic first hit the U.S.
Oregon’s jobless rate dropped slightly in March, according to new data out from the Oregon Employment Department, falling a tenth of a percentage point to 6.0%. Oregon added 20,000 jobs last month. Most of the gains were in the leisure and hospitality sector as bars and restaurants steadily reopened after a broad wintertime shutdown. The state has now regained 54% of the jobs lost in the early days of the pandemic, 153,100 altogether.
US Stocks slipped from record highs yesterday to trade marginally lower as investors await a slew or earnings reports and economic data later this week.
Microsoft has acquired Nuance Communications for $16 billion. The deal gives Microsoft a company that specializes in voice transcription and related artificial intelligence software. Nuance has a particular niche in health care, providing software to digitize conversations from doctor’s visits and facilitate clinical documentation. The acquisition comes about a month after Microsoft closed a $7.5 billion deal for ZeniMax, the parent company of video game publisher Bethesda. That transaction is meant to boost Microsoft’s Xbox against growing video gaming competition.
Federal spending soared in March as the government sent a third round of stimulus payments to Americans, pushing up the budget deficit to a record $1.7 trillion in the first half of the fiscal year. The budget gap is now more than double what it was for the same period a year ago. The deficit was $660 billion last month, 454% higher than it was in the same month a year ago. The government’s spending surge has provided some cushion to the economy from the pandemic’s devastation, but it has also sent deficits soaring to levels not seen since the end of World War II as a proportion of the economy.
US Stocks traded at records highs again last week as the Federal Reserve reaffirmed investors the central bank’s commitment to keep loose monetary policy in place.
U.S. producer prices increased more than expected in March, resulting in the largest annual gain in 9-1/2 years, fitting in with expectations for higher inflation as the economy reopens amid an improved public health environment and massive government funding. The producer price index for final demand jumped 1.0% last month after increasing 0.5% in February. In the 12 months through March, the PPI surged 4.2%. That was the biggest year-on-year rise since September 2011 and followed a 2.8% advance in February.
A deluge of corporate earnings results and economic data due for release this week will test investors after the stock market's latest record-setting rally. Traders have been pricing in the likelihood of a rebound in corporate earnings to coincide with the recent batch of better-than-expected economic data. Another round of firming economic data is expected this week, with the effects of the latest round of fiscal stimulus and recent roll-back of more social distancing restrictions bolstering economic activity.
President Joe Biden will deliver his second major speech on his $2.25 trillion infrastructure plan today as he tries to raise support among Republican voters. White House aides have said they want significant progress made in Congress on the package by Memorial Day. While the recent procedural win means the administration will not have to rely on GOP support for much of that progress, Biden will have to be careful not to alienate any senators from his own party. West Virginia’s Joe Manchin has already expressed doubts on the tax measures in the plan.
Southeast Asia's most valuable startup is ready to go public, making its debut in the SPACsphere. Grab (GRAB) was founded as a ride-hailing company in 2012, before expanding into payments in 2016 and food delivery in 2018. It also offers loans, insurance and has been granted a digital banking license in Singapore. The merger would be the largest between a private business and a blank check company, in a deal that will value SoftBank-backed Grab at about $35B.
Forget about toilet paper, hand sanitizer and semiconductors, restaurants are having trouble securing enough ketchup. With the COVID-19 pandemic turning many sit-down restaurants into takeout businesses, packet prices have risen 13% since January 2020, according to restaurant platform Plate IQ. Some stores can't even get their hands on enough of the condiment, WSJ reports, with managers using generic versions, dishing out bulk ketchup into single-serve cups or seeking secondary suppliers due to the demand.
With much of the market closed on Friday, investors will get their chance to react to the blow-out payrolls number this morning. Friday's report showed the jump in hiring had a broad base across industries, with leisure and hospitality leading gains. Those numbers were reflected in survey data which showed a record share of small-business owners reported job openings in March.
President Biden's second major legislative initiative so far looks unlikely to draw more bipartisan support than his first $1.9T COVID-19 relief package. Republicans are taking aim at the $2T infrastructure plan released last week, with Senator Roy Blunt urging the administration to significantly scale back the project if Biden wants GOP support. It may not matter. Over the weekend, Energy Secretary Jennifer Granholm said Biden is willing to push through the American Jobs Plan. He would prefer to have GOP backing, she told CNN's State of the Union, but if that does not work, he would likely support using reconciliation to allow Democrats to pass it in the Senate.
Stocks aren't the only market to have rallied for much of the last year. In fact, the real estate sector has seen some of the fastest house price growth in more than a decade and there aren't many communities where prices have fallen since the pandemic. Despite rising costs and mortgage rates, homes are still getting snatched off the market at a record pace, per a new Redfin report. About 59% of homes that went under contract had an accepted offer within two weeks of hitting the market, while more than 40% of homes sold above the original asking price. U.S. home prices soared 11.2% in January, their biggest annual increase in 15 years, according to the S&P CoreLogic Case-Shiller national index. The data also "remained consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes
The S&P 500 crossed the 4,000 threshold for the first time yesterday as Wall Street built on a solid March following the rollout of President Joe Biden’s infrastructure plan. The Stock and Bond Markets are closed today in observance of Good Friday.
A measure of U.S. manufacturing activity soared to its highest level in more than 37 years in March, driven by strong growth in new orders, the clearest sign yet that a much anticipated economic boom was probably underway. The Institute for Supply Management (ISM) said on Thursday its index of national factory activity jumped to a reading of 64.7 last month from 60.8 in February. That was the highest level since December 1983. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy.
A group of Democrats in the Oregon legislature wants their peers to look closely at who gets the largest housing subsidy in the state and consider scaling them back. They are proposing changes to the mortgage interest deduction in order to reduce the tax break, they want to remove the deduction for second homes and for primary homes of people with an adjusted gross income of more than $250,000. The legislature’s continued interest in cutting popular tax write-offs was enough to get the Oregon Association of Realtors to send mailers in the Portland area, urging people to reach out to their representatives and tell them they did should “protect the dream of home ownership. ”
U.S. states saw a bigger than expected drop in initial unemployment claims last week as claims fell to a fresh pandemic-era low. Initial unemployment claims came in below 700,000 for the first time since mid-March 2020, declining more than anticipated after last week's unexpected jump.
The U.S. housing market is suffering from its lowest supply in history, and that is taking an increasingly hard toll on sales. Pending home sales, a measure of signed contracts on existing homes, fell a wider-than-expected 10.6% in February compared with January, according to the National Association of Realtors. Sales were 0.5% lower year over year. The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift, but contracts are not closing due to record-low inventory.
President Joe Biden wants $2 trillion to reengineer America’s infrastructure and expects the nation’s corporations to pay for it. The president landed unveiled what would be a hard-hatted transformation of the U.S. economy as grand in scale as the New Deal or Great Society programs that shaped the 20th century. White House officials say the spending will take place over 8 years and will be financed through higher corporate tax rates.