Shares of tech juggernaut Amazon slid after the company posted a quarterly loss and offered a weaker-than-expected current-quarter forecast.  Apple’s stock also declined even after the iPhone-maker exceeded quarterly sales and profit estimates, though the company still cited ongoing supply chain constraints.

A measure that the Federal Reserve focuses on to gauge inflation rose in March, likely cementing the central bank’s intention to raise interest rates by half a percentage in May.  The core personal consumption expenditures price index, which measures costs that consumers pay across a wide swath of items and accounts for how behavior changes in response to market dynamics, increased 5.2% from a year ago.

Pending home sales declined in March for the fifth month in a row as buyers weigh rising interest rates and soaring prices.  The latest data from the National Association of Realtors indicates new contracts fell by 1.2% last month from February.  Sales were down by 8.2% year over year, with pending sales slipping across all four regions of the U.S. to the lowest level in nearly two years.  The sudden large gains in mortgage rates have reduced the pool of eligible homebuyers, and that has consequently lowered buying activity.  Homebuyer competition also dropped in March according to a recent report from RedFin, which showed the number of bidding wars declined for the first time in six months.

Gross domestic product here in the US unexpectedly declined at a 1.4% annualized pace in the first quarter, marking an abrupt reversal for an economy coming off its best performance since 1984, according to the Commerce Department.  The negative growth rate missed even the subdued Dow Jones estimate of a 1% gain for the quarter. GDP measures the output of goods and services in the U.S. for the three-month period.  A plethora of factors conspired to weigh against growth during the first three months of 2022, which fell off a cliff following the 6.9% gain to close out last year.  However, the decline came largely from factors likely to reverse later in the year.

Microsoft’s stock price surged after the company reported an earnings beat in its most recent quarter. The company’s revenue guidance for each of Microsoft’s three business segments also exceeded the expectations of analysts 

Shares of the Boeing are sharply lower after the company reported first-quarter sales and revenue that missed analysts’ estimates. Boeing also said it’s pausing production of its 777X plane, and that deliveries may not start until 2025.

Shares of Facebook parent company Meta are higher after the company reported earnings that topped estimates even though revenue disappointed.

Home prices increased 19.8% in February year over year, according to the S&P CoreLogic Case-Shiller national home price index. That is up from the 19.1% annual increase in January and is the third-highest reading in the index’s 35-year history.  Sun Belt cities continued to see the highest gains. Phoenix, Tampa, and Miami saw annual home price gains of 32.9% 32.6% and 29.7%, respectively. All 20 cities reported higher price increases in the year ending February 2022 versus the year ending January 2022.  Minneapolis, New York and Washington, D.C., saw the smallest price gains, although they were still in the double digits.

U.S. consumer confidence dampened slightly in April but remains high even as inflation continues to cloud their optimism about the rest of the year. The Conference Board said that their consumer confidence index — which takes into account consumers’ assessment of current conditions and their outlook for the future — edged down in April, from March.

More workers may soon be able to stake some of their 401(k) retirement savings to bitcoin, as cryptocurrencies crack even deeper into the mainstream.  Retirement giant Fidelity said that they launched a way for workers to put some of their 401(k) savings and contributions directly in bitcoin, potentially up to 20%, all from the account’s main menu of investment options. Fidelity said they are the first in the industry to allow such investments without having to go through a separate brokerage window, and it’s already signed up one employer that will add the offering to its plan later this year.

Twitter has accepted Elon Musk’s buyout offer.  Musk is purchasing the social media giant for $54.20 per share, or about $44 billion. The Tesla chief will take the company private, and also said he planned to upgrade Twitter by protecting free speech, open-sourcing algorithms, fighting spam bots and "authenticating all humans."  Twitter's board unanimously approved the acquisition. The deal is expected to close sometime in 2022, although that will hinge on approvals from both regulators and shareholders.

Shares of Coca-Cola are higher after the company beat expectations on the top and bottom line in the most recent quarter. The beverage giant reported adjusted earnings of 64 cents per share on revenues of $10.5 billion, while analysts expected 58 cents per share on $9.83 billion in revenue.

Ford Motor is set to be the first automaker to bring a mainstream, full-size electric pickup to the U.S. market, poised to capitalize on a first-mover advantage in what’s expected to be a hotly contested segment in the years to come.  Ford CEO Jim Farley said the company plans to scale production of their electric F-150 Lightning pickup faster than their competitors, with plans to increase production of the Lightning at a plant in Dearborn, Michigan, to 150,000 units in the next year or so, up from an initial target of 40,000 vehicles.  That would dwarf plans of Rivian Automotive and General Motors, which are expected to be in the tens of thousands.

A rough April for Wall Street has seen the S&P 500 slide for three straight weeks, and now investors will grapple with a loaded slate of earnings reports and key inflation data. Rising interest rates and persistently high inflation have weighed on stocks and created concerns about an economic slowdown. The coming days will bring fresh looks at some the world’s biggest companies, as well as economic growth.  The week ahead features big reports from nearly every industry, but tech stocks will be a main focus.

So far 20% of the companies in the S&P 500 have reported actual results for Q1 2022 to date. Of these companies, 79% have reported actual earnings per share above estimates, which is above the five-year average of 77%.

Mortgage rates rose for the 7th consecutive week last week driven higher by the higher yields in the bond market.  The average 30-year fixed-rate mortgage increased to 5.11% for the week ending April 21, according to Freddie Mac. This is up from last week's 5% and last year’s 2.97%. Other mortgage rates also increased this week. The 15-year mortgage rate nearly doubled since last year, rising to 4.38%. That’s up from 2.29% last year.  Although rising interest rates and higher home prices are making homeownership more expensive for many homebuyers, it is also helping reduce the intense competition seen in the housing market over the past year.

Federal Reserve chair Jerome Powell signaled in commentary yesterday that the central bank was prepared to raise interest rates rapidly starting in May as it tries to cool down the economy and prevent fast inflation from becoming a lasting feature. A larger-than-usual increase of half a percentage point “will be on the table for the May meeting,” Mr. Powell said the Fed needs to be moving a little more quickly to raise borrowing costs in an effort to cool down demand and the broader economy.

Elon Musk said that he has commitments worth $46.5 billion to finance his proposed bid for Twitter. In a filing that detailed the funding, he also said that he was exploring whether to launch a hostile takeover for the social media company. 

Verizon Communications Inc. showed a net loss of postpaid phone subscribers in its latest quarter, calling out “competitive dynamics within the industry,” though it said it had its best quarter of broadband net additions in more than a decade. The company on Friday reported net income of $4.7 billion, and revenues rose to $33.6 billion
 

The average interest rate on the most popular U.S. home loan climbed to a 12 year high and fewer homebuyers sought properties in a sign that the Federal Reserve's aim of cooling the housing market may be beginning to have an impact.  The popular 30 year fixed rate mortgage is now 5.27% with the bulk of the run up occurring since the start of the year.

Sales of existing homes dropped 2.7% in March to a seasonally adjusted, annualized rate of 5.77 million units, according to the National Association of Realtors. February’s reading was also revised downward with a larger-than-usual dent, from 6.02 million units to 5.93 million.  March sales were 4.5% lower than the same period in 2021.  The reading is based on closings, meaning the contracts were likely signed in January and February, when mortgage rates began to rise but had not yet shot up as sharply as they did in March.  Higher rates exacerbated an already pricey market for buyers. The median price of an existing home sold in March was $375,300, an increase of 15% from March 2021. That’s the highest median price ever recorded by the Realtors.

Shares of IBM are sharply higher after the hardware, software and consulting provider reported stronger-than-expected first-quarter results, inspiring analysts to raise price targets and estimates.  The 110-year-old technology company has become more favorable to investors as it generates income and continues to pay dividends, which can serve as a hedge against market uncertainty.

Netflix stock lost nearly a third of its value after it lost 200,000 subscribers on a net basis, well short of its scaled-back guidance for additions of 2.5 million subscribers. And the earnings call set the stage for a lower-cost, ad-supported service.  Netflix's first subscriber loss in a decade left the company down to 221.64 million global subscribers. The streaming service is also forecasting a drop of 2 million net subscribers for the second quarter of this year.

Blackstone, the private equity firm announced a nearly $13 billion deal to acquire American Campus Communities, which owns more than 200 properties near universities across the country. The deal, which adds to Blackstone’s $500-billion-plus real estate holdings, comes as an activist investor pressured American Campus Communities to sell.

IBM reported better-than-expected first-quarter results led by strong performance in its software and consulting services businesses. IBM said that for the first three months of the year it earned $1.40 a share, excluding one-time items, on $14.2B in revenue. The results topped the estimates of Wall Street analysts.
 

In earnings news, Johnson and Johnson reported first-quarter sales of $23.4 billion, slightly missing Wall Street expectations but growing 5% over the same quarter last year. The company posted earnings that beat expectations and increased 3.1% over the same period of 2021. J&J reported net income of $5.15 billion, a nearly 17% decrease over the first quarter of 2021.

Homebuilding unexpectedly rose in March, but starts for single-family housing tumbled amid rising mortgage rates. The NAHB Housing Market Index fell to a seven-month low of 77 for April. The housing market faces an inflection point as an unexpectedly quick rise in interest rates, rising home prices and escalating material costs have significantly decreased housing affordability conditions, particularly in the crucial entry-level market.

The International Monetary Fund on Tuesday cut its global growth projections for 2022 and 2023, saying the economic hit from Russia’s unprovoked invasion of Ukraine will propagate far and wide. The Washington-based institution is now projecting a 3.6% GDP rate for the global economy this year and for 2023. This represents a 0.8 and 0.2 percentage point drop, respectively, from its forecasts published back in January.

The earnings spotlight turns to blue chips next week with Johnson and Johnson, IBM, Bank of America, Procter & Gamble, Travelers, Dow, American Express and Verizon Communications some of the big names heading into the earnings confessional. Despite the earnings deluge, Elon Musk's pursuit of Twitter could still be the top story of the week with new twists anticipated following the poison pill fired off by Twitter. On the economic calendar, the focus turns to housing with the National Association of Home Builders' survey, a housing starts report, and the existing home sales update all due out. The Philadelphia Fed manufacturing survey and latest PMI prints will also be released.

Bank of America posted first-quarter profit on Monday that exceeded analysts’ estimates, helped by the better-than-expected credit quality of its borrowers. The bank said that profit declined 12% to $7.07 billion, or 80 cents per share, exceeding analyst estimates. Revenue climbed 1.8% to $23.33 billion, roughly matching expectations.

The Goldman Sachs economics team says that there is now a 35% chance of a U.S recession over the next two years, with the labor market a particular problem for the Federal Reserve. The large gap between jobs and workers, which keeps wage growth elevated, has historically only declined during periods of economic contraction

Oregon’s jobless rate fell again last month, dropping to 3.8%, down from 4.0% in February. Unemployment is at the lowest level since COVID-19 upended the state’s economy and is near the historic lows that predated the pandemic.  Oregon has regained about 9 out of 10 jobs that were lost in the pandemic recession, according to the Oregon Employment Department. Oregon’s jobless rate is tracking closely to the national rate, which was 3.6% last month.  Oregon employers added 5,600 jobs last month. Construction accounted for more than a quarter of the new jobs, with total employment hitting a record high of 117,500.

Shares of JPMorgan Chase are lower after the bank reported a $524 million hit from market dislocations caused by sanctions against Russia due to the war in Ukraine. The bank posted better-than-expected earnings and revenue in the first quarter, but profit fell 42% from the year prior.

Shares of Delta airlines rose after the company forecast a return to profitability in the current quarter. Delta posted a narrower-than-expected loss per share in its fiscal first quarter and beat consensus revenue expectations.  Other travel stocks jumped after Delta’s report. American Airlines soared 9.5%, Southwest Airlines jumped 6.8%, and Norwegian Cruise Line added 5.9%.

Stocks were lower for the 3^rd day in a row yesterday, after investors saw the high inflation numbers which raised expectations of tighter monetary policy from the Federal Reserve, which investors fear could slow the economy.

Airfare prices are surging as higher fuel prices and strong travel demand drive up the cost of flights.  Consumers spent $8.8 billion on domestic U.S. airline tickets last month, up 28% compared with March 2019, before the pandemic, while fares surged 20%, Bookings only rose 12%.  Higher airfares are one of the latest examples of inflation, which is hitting consumers at gas stations, supermarkets and in the housing market.  Airline executives have been confident that they could pass along the bulk in the surge in jet fuel to travelers, who so far appear willing to shell out more for travel.

The U.S. Department of Education has extended the payment pause on federal student loans for the sixth time since the pandemic began more than two years ago.  This time, borrowers have been told they won’t have to resume paying on their student loans again until September. Despite improvements to the economy since the pause on federal student loan bills was first announced in March 2020, President Joe Biden has said it remains too early to ask borrowers to begin paying again.

Inflation in March rose by 8.5% from a year ago, the fastest annual gain since December 1981.  Surging food, energy and shelter costs helped account for the gain.  Real worker earnings fell by another 0.8% during the month as the cost of living outpaced otherwise strong pay gains.

The steep upward climb in mortgage rates still isn’t showing any signs of stopping.  The 30-year fixed mortgage rate mortgage hit 5.06%.  The 15 year mortgage rate is also higher at 4.29%.  Only 24% of consumers believe it’s a good time to buy a home, with similar levels of pessimism expressed by nearly all of the demographic groups surveyed.  Over the past three months, mortgage rates have risen 1.5 percentage points.  The latest rise represents the fastest three-month increase in rates since 1994. 

Ratings agency S&P Global placed Russia under a “selected default’ rating, following the country offering bondholders payments in rubles, not dollars.  Russia attempted to pay in rubles for two dollar-denominated bonds that matured on April 4, which amounted to a “selective default” because investors are unlikely to be able to convert the rubles into dollars equaling the amounts due.  Moscow has a grace period of 30 days from April 4 to make the payments of capital and interest, but S&P said it does not expect it will convert them into dollars given Western sanctions.

Markets face what could be a hot inflation report in the week ahead and a batch of big bank earnings to start the earnings season.  JP Morgan Chase and Blackrock kick off the financial industry’s first-quarter earnings releases Wednesday, with Citigroup, Wells Fargo and Goldman Sachs reporting Thursday.  The war in Ukraine will remain a focus, as investors look for any signs of change in the crisis.

JetBlue Airways is planning to trim their summer schedule to avoid flight disruptions as they scrambles to hire ahead of what executives expect to be a monster peak travel season.  The airline canceled more than 300 flights over the weekend, a week after bad weather in Florida kicked off hundreds of flight cancellations and delays on JetBlue and other carriers.  Airlines are scrambling to staff up to handle a surge in travelers this spring and summer. Staffing shortages contributed to hundreds of flight cancellations and delays last summer and airlines executives have been looking for ways to avoid a repeat.

Battered, bloodied and bruised by 2020, employment in the Portland area rebounded in a big way. The region was No. 10 in job growth among large metro areas during 2021, according to new data from the U.S. Bureau of Labor Statistics. Oregon was No. 6 among all states, primarily because of the Portland area’s rapid recovery, according to Christian Kaylor, economist with the Oregon Employment Department.
 

Many of the recent sanctions leveled on Russia have power because they're based on the U.S. dollar, which is the most widely used currency in global financial markets, trade and central bank reserves. However, some are cautioning that weaponizing the greenback in this fashion could erode its dominance, stoking fears that smaller currencies like the renminbi could gain a bigger role on the international stage. China is already buying Russian energy with the yuan, while India is looking into a rupee-ruble trade arrangement. Wars upend the dominance of currencies and serve as a doula to the birth of new monetary systems.

Down at the Bitcoin 2022 conference in Miami Beach, billionaire venture capitalist Peter Thiel is causing a stir, listing an enemies list for Bitcoin. Speaking in front of the attendees, Thiel named fellow billionaire Warren Buffett of Berkshire Hathaway enemy No. 1, describing him as a "sociopathic grandpa from Omaha.”

The 10 year treasury rate hit a fresh 3-year high this morning as investors continued to digest minutes from the previous Fed meeting.  The yield on the benchmark 10-year Treasury note is now 2.70% near its highest level since March 2019, as it continues its jump following recent comments from the Fed.

The first commercial drone deliveries in the U.S. will take off today as Alphabet's Wing unleashes its aircraft over the suburban towns of Frisco and Little Elm, which are located just north of Dallas, Texas. If successful, the service could revolutionize how goods are currently transported around cities. Wing has partnered with Walgreens, Blue Bell Creameries, Easyvet, and Texas Health for the initial rollout, meaning consumers will be able to order prescription pet meds and ice cream, among other items.

Warren Buffett is definitely making a return to dealmaking after bemoaning the lack of good investment opportunities. Fresh off an $11.6B deal to buy insurance firm Alleghany Corporation, the Oracle of Omaha is sinking $4.2B into HP, taking an 11.4% stake in the computer and printer maker. Back in March, Buffett also disclosed a 15% stake in Occidental Petroleum worth $7.6B amid rising oil prices and Russia's invasion of Ukraine.

The labor market tightened further last week, with initial jobless claims falling to their lowest level in more than 53 years, the Labor Department reported Thursday.  Initial filings for unemployment dropped to 166,000, well below the Dow Jones estimate of 200,000 and 5,000 under the previous week’s total, which was revised sharply lower. Last week’s total was the lowest since November 1968.

Investors have been hit with an early surprise before the release of today's FOMC meeting minutes, which were supposed to give some clues about a reduction of the central bank's $9T balance sheet following a quarter-point rate hike in March. The clues are no longer needed. Fed Vice Chair Lael Brainard pre-empted the minutes on Tuesday by saying a "rapid" reduction could happen as soon as May, calling the move "of paramount importance" to bring down inflationary forces, while the Fed is prepared to take stronger action if indicators show such action is warranted.

The average rate on the 30-year fixed mortgage just crossed 5%, marking the first time it has passed the threshold since 2011 (save two days in 2018). It wasn't that long ago that consumers could have refinanced their mortgages below 3%, but the majority of those applications have since dried up. Homebuyers are also facing a pricey housing market, with a report from CoreLogic showing prices in February were up 20% from a year ago, marking the 12th consecutive month of annual increases.

The contest to buy Spirit Airlines is heating up as a drive to consolidate takes off in the budget airline sector. JetBlue just offered $3.6B, or $33/per share, for the Florida-based carrier, which is roughly 40% more than the bid advanced by Frontier Airlines in February. Spirit's board said it will work with its financial and legal advisors to evaluate the latest deal and pursue what's in the best interest of shareholders.

Stock indices have notched an impressive rally since mid-March, with the three major indices sailing out of correction territory Over the last two weeks, the S&P has produced one of its sharpest rallies in history, larger than the biggest 10-day rallies in seven of the S&P's 11 bear markets since 1927.  The sharp unanticipated rebound is having analysts rewrite their latest market forecasts, though some are holding strong by comparing it to a bear market trap.

The war in Ukraine has been a boon for Chinese companies as Western firms continue to suspend or exit their businesses in Russia. In fact, China's top envoy to Russia, Zhang Hanhui, has urged businesspeople in Moscow to seize economic opportunities created by the crisis, like adjusting their company structures and filling the "gap" in the Russian market.

Elon Musk will join Twitter’s board of directors after taking a 9.2% stake in the social media company, according to a release filed with the SEC.  Shares were up more than 6% on the news.  Musk’s term is set to expire in 2024, according to the filing. For his entire board term or 90 days after, Musk cannot be the beneficial owner of more than 14.9% of the company’s common stock outstanding.

The first quarter came to a close yesterday with the S&P 500 losing 4.8% and the NASDAQ down 10%, their worst quarterly performance since the first quarter of 2020

According to the Bureau of Labor Statistics the US economy added 431,000 nonfarm jobs in March, and the unemployment rate fell to 3.6%. Professional and business services contributed 102,000 to the total, while retail was up 49,000 and manufacturing added 38,000.  This brings the total employment level within 408,000 of where it stood pre-pandemic.

Americans spent more in February on hotels, restaurants and other services as the omicron wave faded, governments lifted restrictions and more people went out again.  They cut spending on new cars and trucks. New vehicles are hard to find because of major production delays, and even when they are ready for purchase, some customers have been put off by record prices and rising interest rates.  The savings rate rose to 6.3% from 6.1%, but was still a bit below pre-pandemic levels. After soaring early in the pandemic, the amount of money people are saving has declined gradually over the past year.