Buyers came roaring back to the housing market in October, even as mortgage rates rose. Signed contracts on existing homes, so-called pending sales, jumped 7.5% from September, according to the National Association of Realtors. Sales were still 1.4% lower than October 2020, but last fall marked a cyclical high in the housing market. Pending sales are a forward-looking indicator of sales that will close in one to two months.
Shares of the social media company Twitter are lower after news that CEO Jack Dorsey is stepping down, effective immediately. Parag Agrawal, the company’s chief technology officer, will take over as chief executive. Dorsey was serving as both the CEO of Twitter and Square, his digital payments company. He will remain a member of the board until his term expires in 2022.
Washington and Wall Street are optimistic that Congress can pass a bill to fund the government and avert a partial shutdown before a Friday deadline. Democrats and Republicans appeared to be coalescing around a bill to fund the government through late January or early February. A lapse in government funding can lead to furloughs of federal workers and a lapse in some government services.
The Conference Board Leading Economic Indicator Index for the U.S. increased by 0.9 percent in October. The U.S. LEI rose sharply las month suggesting the current economic expansion will continue into 2022 and may even gain some momentum in the final months of this year. Gains were widespread among the leading indicators, with only the average workweek and consumers' outlook making negative contributions.
Shares of CVS Health are higher after the company said that they will close about 900 stores over the next three years, as it adjusts to shoppers who are buying more online. The company announced that they will focus more of its efforts on digital growth and turning their stores into destinations that offer a range of health-care services, from flu shots to diagnostic tests.
Not even coffee is immune to the powerful forces of extreme weather and inflation. Coffee futures climbed to the highest level since 2012. It's just the latest spike for a commodity that has seen its value surge more than 80% so far this year. Unfortunately, this means coffee drinkers will be paying higher prices at grocery stores and coffee shops in the coming months. And that will only add to the inflationary pressures currently causing anxiety for millions of Americans. The blame for the coffee spike falls in large part on severe drought and unusual frost conditions in Brazil, the world's largest supplier of coffee beans.
First-time claims for unemployment insurance were little changed over the past week, indicating that the heightened pace of layoffs during the pandemic may have hit a plateau. Initial filings for the week totaled 268,000, a decline of 1,000 from a week ago. The total was the lowest since the beginning of the pandemic but in close keeping with where claims have been over the past month.
U.S. homebuilding unexpectedly fell in October as activity remains constrained by shortages of materials as well as scarce land and labor. Housing starts slipped 0.7% to a seasonally adjusted annual rate of 1.520 million units last month, according to the Commerce Department. Permits for future homebuilding increased 4.0% to a rate of 1.650 million units in October. Lumber remains expensive and copper prices, another essential material in home building, are high. In addition, there were about 333,000 job openings in the construction industry as of the end of September, and according to the NAHB, availability of land for building is at multi-decade lows.
The widely held Nvidia’s stock rose more than 5% after they reported earnings for their third fiscal quarter that beat expectations for both earnings and sales. The company also issued a bullish forecast. Nvidia’s stock has been on a big run, with shares up more than 124% year to date. The company has had more demand than they can fill, especially for its hard-to-find GeForce graphics cards that are popular with gamers.
Oregon’s unemployment rate hit another low in October, dropping from 4.7% to 4.4% -- among the lowest rates on record. Oregon added 4,700 more jobs after a flat September. That’s strong growth by historical standards but down from the average of 6,800 new jobs over the prior six months. “This was the fifth month in a row that we’ve seen a significant decline in Oregon’s unemployment rate as more people continue to find work,” said Gail Krumenauer, economist with the Oregon Employment Department. She said the state has recovered 74% of the jobs lost to the pandemic, compared to 81% nationally.
Higher prices and longer wait times do not appear to be turning buyers away from the nation’s homebuilders. With demand still surging, homebuilder confidence in the market for single-family homes rose more than expected in November, to the highest level since last May. Confidence rose 3 points to 83 on the National Association of Home Builders Index. Anything above 50 is considered positive. Sentiment stood at 90 in November 2020. Lack of resale inventory combined with strong consumer demand continues to boost single-family home building.
Shares of Home Depot are higher after the company reported much better-than-expected earnings. The company also issued positive full year guidance.
The number of workers who quit their jobs in September rose to a record high for the third month in a row, making it harder for companies to maintain staff levels during the worst labor shortage in decades. Some 4.4 million people quit their jobs in September. By contrast, just half as many had quit during the early stages of the pandemic. Put another way, 3% of the labor force quit in September. That’s also the highest level since the government began keeping track in 2000.
Consumer confidence hit a 10-year low in November as inflation climbed to the highest levels since the early 1990s, complicating efforts from policymakers to sell the case that the current surge of price increases is temporary.
Apple has announced that their users could soon store state-issued identification cards in the iPhone’s Wallet app, billing it as a more secure and convenient way for customers to provide credentials in a variety of in-person and remote settings. The feature, when combined with Apple’s biometric security measures like Face ID, could cut down on fraud. But the move has brought questions from industry observers about why local authorities are ceding control of citizens’ identities to a $2.46 trillion private corporation. Apple has also figured out how to make states pay some of the costs for this service.
Johnson & Johnson is to spin off its consumer products division, best known for Band-Aids and baby shampoo, as the world’s largest healthcare company seeks to focus on pharmaceuticals and medical devices. The division, which is forecast to generate $15bn in sales this year, will be split off in 18 to 24 months. The company plans to make the transaction tax-free and keep the overall dividend at the same level. Shares in J&J gained 4 per cent this morning on the news… It is the latest in a wave of well-known global companies to announce plans to split up this week, following US industrial conglomerate General Electric and Japan’s Toshiba, in an effort to slim down and focus on individual businesses.
The United Kingdom and European Union are back at the negotiating table today in an attempt to dodge a looming trade war. While Britain officially left the EU in January 2020, a number of hard-fought trade arrangements that have been inked since then have been criticized for disrupting trade. Specifically, the U.K. feels there are difficulties in implementing required checks on goods moving from Great Britain to Northern Ireland.
The Chinese e-commerce giant Alibaba said $84.5 billion in merchandise was sold on its platforms during the Singles Day shopping festival that ended yesterday, an 8.5 percent increase over last year and an indication that Beijing’s campaign to tighten regulation of internet companies has not dimmed consumers’ enthusiasm for buying stuff online. The growth in sales was down from the 26 percent increase that the company reported in 2020 compared with the year before.
Inflation is looking a lot less "transitory" after CPI figures released yesterday, which showed consumer prices jumping 6.2% from a year ago and the fifth straight month higher than 5%. It's also the fastest rate since 1990, and while that might cause some worry in the general population, Wall Street appears to be discounting the effects. Many continue to argue that the Fed won't get too aggressive, inflation could moderate next year, while some think stocks could even benefit along with a rise in asset prices. Businesses are passing on higher costs to consumers, with 60% of small business owners raising prices in the previous 90 days, according to a November survey.
The magic faded at Disney on the release of Earnings as shares of the company fell nearly 5%. Subscription growth for Disney+, its flagship streaming service, slowed in the latest quarter, fueling fears that the days of big subscriber counts have plateaued. Only 2.1M subscribers were added during the fiscal fourth quarter (for a total of 118.1M), down from the 12.6M new subs notched in FQ3. Slowing growth among rival streaming services like HBO Max, Paramount+ and Peacock suggests strong pandemic gains are disappearing as more people seek entertainment outside the house.
In his first sales in more than five years, Elon Musk this week let go of $5B of stock in Tesla. It comes just days after he promised Twitter he'd sell a 10% stake in the electric carmaker, with 58% of respondents voted "Yes" in a highly-publicized poll.
The next EV maker to hit the public markets is set to make an electrifying debut today. Rivian Automotive (RIVN) has priced its IPO at $78/share, above an already-elevated range of $72 to $74, raising a whopping $11.9B for the biggest share sale of 2022. With a market capitalization of over $66B, Rivian would be roughly on par with Nio, but way bigger than Honda, slightly smaller than Ford (because that makes sense for a pre-revenue company).
The consumer price index surged 6.2% from a year ago in October, the most since December 1990. Core inflation, stripping out food and energy, increased 4.6%, the fastest gain since November of the same year. Energy, shelter and vehicle costs led the gains, which more than wiped out the wage increases that workers received for the month. Shelter costs, which make up one-third of the CPI computation, increased 0.5% for the month and are now up 3.5% on a year-over-year basis, pointing to more reasons for concern that inflation could be more persistent than policymakers anticipate.
General Electric plans to break into three separate companies, effectively ending its status as America’s best-known industrial conglomerate after years of trying to respond to flaws in its model exposed by the financial crisis. The split into three public companies focused on healthcare, energy and aviation marks the final step in the undoing of the sprawling group created by Jack Welch at the end of the last century. It is also the boldest move yet by chief executive Larry Culp in his years-long effort to streamline the diversified company, which has faced growing investor pressure over its underperformance.
After months of negotiations and a standoff between progressive and moderate Democrats, the $1T package of road, broadband, and other "hard" infrastructure improvements has passed the U.S. House of Representatives with a 228-to-206 vote. While a signing ceremony wasn't able to come together this weekend, President Biden said one would be scheduled "soon" after he hailed the bill as a “once-in-a-generation investment. Democrats have yet to bring the larger $1.75T package on social entitlement expansion and climate change initiatives over the finish line. That would be the largest increase in entitlements since the 1960’s.
The S&P 500 has generated returns including dividends of 27 per cent so far this year as the blue-chip index has set record highs on more than 60 trading days. Last week alone, US markets rallied 2 per cent, the best performance since June. Companies beaten down during the pandemic such as airlines, cruise operators and casinos advanced after Pfizer’s announcement on Friday that its antiviral pill successfully reduced hospitalization rates stemming from Covid-19 by 90 per cent
Tesla shares were under pressure on Monday after millions of Twitter users polled by chief executive Elon Musk concluded that he should sell 10 per cent of his stake in the electric carmaker. The 24-hour poll, which was conducted over the weekend, is the latest stunt by Musk to delight fans but risk controversy.
The US economy added 531,000 jobs in October and the unemployment rate fell to 4.6%, both were better than expected. The leisure and hospitality industries led the way in job creation.
U.S. unit labor costs surged in the third quarter, while productivity declined at its sharpest pace since 1981, adding to signs that high inflation could last for a while. The Labor Department said that unit labor costs, the price of labor per single unit of output, increased at an 8.3% annualized rate last quarter. Outside the coronavirus distortions in 2020, the jump in labor costs last quarter was the largest since the first quarter of 2014. Labor costs advanced at a 4.8% rate compared to a year ago. The report followed on the heels of news last month that wage growth in the third quarter was the largest on record.
The U.S. trade deficit hit an all-time high of $81 billion in September as American exports fell sharply while imports, even with supply chain problems at American ports, continue to climb. The September deficit topped the previous record of $73.2 billion set in June. The deficit is the gap between what the United States exports to the rest of the world and the imports we purchase from foreign nations.
The Federal Reserve announced yesterday they will soon begin reducing the pace of their monthly bond purchases, the first step towards pulling back on the massive amount of help the Fed has been providing markets and the economy. Tapering of bond purchases will start “later this month,” the policymaking Federal Open Market Committee said in its post-meeting statement. The process will see reductions of $15 billion each month -- $10 billion in Treasury’s and $5 billion in mortgage-backed securities – from the current $120 billion a month that the Fed is buying. Investors have moved the futures market to show they expect the Fed to actually raise interest rates in July of 2022.
A measure of U.S. services industry activity surged to a record high in October likely as declining COVID cases boosted demand, but businesses remained burdened by snarled supply chains and the resulting exorbitant prices. The Institute for Supply Management said their non-manufacturing activity index jumped to a reading of 66.7 last month. That was the highest since the series started in 1997 and followed a 62 reading in September. A reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of U.S. economic activity.
(Portland, OR) -- The Multnomah County Board of Commissioners is set to return to in-person meetings tomorrow following more than a year of virtual meetings. The meetings went online on March 18, 2020 because of the pandemic. Starting on Thursday, the meetings will be hybrid with some virtual and some in-person presentations and testimony. Chair Deborah Kafoury says while the pandemic isn't over, this step is part of an ongoing effort to safely open facilities and services.
(Portland, OR) -- Oregon is reporting over two-dozen new coronavirus deaths. The Oregon Health Authority reported 29 new deaths from COVID-19 yesterday, raising the state's death toll from the pandemic to four-thousand-405. The health department also reported one-thousand-123 new cases of COVID-19. There are currently 537 people hospitalized with coronavirus statewide, which is three less than on Monday.
(Vancouver, WA) -- Police say an investigation into a drug overdose death in Clark County has resulted in a drug bust. Last May, the Clark County Sheriff's Office investigated a death that happened because the victim took counterfeit Oxycodone that was laced with fentanyl. Over the last five months, an investigation led detectives to a house near Northeast Padden Parkway and Ward Road. A search of the house found 11-thousand counterfeit Oxycodone pills suspected of containing fentanyl, a large quantity of steroids and other pills, six guns, and 32-thousand dollars in cash. Two people were arrested.
(Portland, OR) -- Police say a pair of drug distribution cells with connections to Mexico have been busted in the Portland area. Federal agents and local police worked nearly a year to identify the suspects. A federal grand jury issued indictments for two ringleaders and more than a dozen associates who allegedly transported the drugs from California to Oregon. Agents seized 200-thousand counterfeit oxycodone pills suspected to contain fentanyl, two pounds of fentanyl powder, 40 pounds of methamphetamine, 45 pounds of heroin, 13 pounds of cocaine, nine guns and nearly one-and-a-half million dollars in cash.
(Hillsboro, OR) -- Washington County is banning flavored tobacco products. The Washington County Board of Commissioners voted three to two yesterday to approve an ordinance prohibiting the sale of any flavored tobacco products, including menthol cigarettes, flavored synthetic nicotine, vaping devices, flavored cigars, and e-hookahs that have any flavor besides natural tobacco. Washington County is now the first county in the state to pass such a ban. The ordinance goes into effect on December 2nd and won't be enforced until January 1st of next year.
US Stocks rose to another record high yesterday — ahead of the key Federal Reserve decision — as strong corporate earnings gave investors confidence in a year-end rally. 60% of S&P 500 companies have reported quarterly earnings with 82% of those companies beating earnings estimates.
According to the payroll company ADP private sector job creation popped higher in October thanks to a burst in hiring in the hospitality sector. Companies added 571,000 for the month. It was the best month for jobs since June.
Zillow Group is looking to sell about 7,000 homes as they seeks to recover from a fumble in its high-tech home-flipping business. The company is seeking roughly $2.8 billion for the houses, which are being pitched to institutional investors. It’s more likely that Zillow will sell the properties to a multitude of buyers rather than packaging them in a single transaction. The move to offload homes comes as Zillow seeks to recover from an operational stumble that saw them buy too many houses, with many now being listed for less than they paid. The company typically offers smaller numbers of homes to single-family landlords, but the current sales effort is much larger than normal.
U.S. manufacturing activity slowed in October as a measure of new orders dropped to a 16-month low and factories continued to experience delays with deliveries of raw materials. The Institute for Supply Management said their index of national factory activity slipped to a reading of 60 last month from 61 in September. A reading above 50 indicates expansion in manufacturing, which accounts for 12% of the U.S. economy.
U.S. construction spending unexpectedly fell last month amid declines in outlays on both private and public projects. The Commerce Department said that construction spending dropped 0.5% after edging up 0.1% in September. Year on year construction spending was 7.8% higher. The government reported last week that gross domestic product increased at a 2.0% annualized rate, stepping down from the April-June's robust 6.7% pace.
Americans’ opinions on the U.S. economy have soured noticeably in the past month, a new poll finds, with nearly half expecting economic conditions to worsen in the next year. Just 35% of Americans now call the national economy good, while 65% call it poor, according to a poll by The Associated Press Center for Public Affairs Research. That’s a dip since September, when 45% of Americans called the economy good, and a return to about where views of the nation’s economy stood in January and February, when the pandemic was raging across the nation