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Oil and Gold Fall


Today is the last trading day of the third quarter. Ahead of the open, the Dow was up 1.4% for the third quarter. The S&P 500 was up about 1%. The Nasdaq is up more than 2%, while the small-cap Russell 2000 has lost more than 6%. (CNBC)

US drugstore chain operator, Walgreen, reported a 6.2% rise in quarterly sales, helped by higher prescription sales. Prescription sales, which made up nearly two thirds of the company's total sales, rose 9.3%. The company reported a loss of $239 million due to the amendment and exercise of its Alliance Boots call option.  (Reuters)

FedEx (FDX) has approved the repurchase of up to 15 million shares or about 5.2% of its outstanding shares. The cost would be more than $2.4 billion based on the package delivery company’s current stock price. (Associated Press)

Fewer Americans signed contracts to buy homes in August, suggesting that real estate sales will remain sluggish over the next few months. The pending home sales index fell 1% over the past month. Higher prices and weak wage growth has limited buying, as the index is 2.2% below its level from a year ago. (Associated Press)

Personal Income and Spending Climb


We are in the home stretch of the third quarter with just two trading days left.  As we wrap things up we have seen big intraday swings in the stock markets and that looks to continue today.  (Fox Business News)

Personal income rose 0.3% in August and spending rose 0.5%.  Both of the number are about what was expected and show a growing economy with low inflation. (Bloomberg)

U.S. consumer sentiment finished September at its strongest in more than a year on growing optimism about the economy and more favorable outlook on future income. The Thomson Reuters/University of Michigan's final September reading on the overall index on consumer sentiment finished at 84.6 up from 82.5 at the end of August. (Reuters)

Harley-Davidson, trading under the ticker HOG, is recalling more than 105,000 motorcycles from the 2014 model year because their clutches may fail, causing stopped bikes to creep forward and potentially crash. The company is also recalling nearly 1,400 bikes made earlier this year to test for possible fuel tank leaks. (Associated Press)

Banks are getting more of their profits from fees. The average fee for using an out-of-network ATM climbed 5% over the past year to a new high of $4.35 per transaction.  Overdraft fees also surged, rising on average over the past 12 months to $32.74. (Associated Press)
 

Where Are the Jobs?


There is a decades-long trend of prime working-age males, ages 25 to 54 falling away from the U.S. labor force. Their participation rate slid to 88.4% in August in a steady decline from 97.9% in 1954. Over the last 10 years, the slump was the steepest for those ages 25 to 34. About 7 million male Americans waste their best years of wealth formation not employed or even trying to find work. The portion of married-couple families with only the wife employed rose to 7.8% in 2013 from 5.7% in 1994. (Bloomberg)

But some things in the labor market never seem to change. The median American worker has been on the job for 4.6 years.  Job tenure stretches out considerably as people age. Nearly 50% of people between 20 to 24 have been in their current job for less than a year. For workers age 35 to 44, median tenure on the job is 5.2 years. For ages 45 to 54 the median is 7.9 years. And for workers older than 55, most workers have been on the job for more than 10 years, with more than a quarter having tenure longer than 20 years. (Wall Street Journal)

American companies have seldom spent more money than they are now buying back stock. The same can't be said for their executives. The ratio of buys to sells is near the lowest since 2000. A total of 7,181 insiders bought their own stock this year through Sept. 12 and 23,323 sold shares. At the same time, corporate repurchases reached $275 billion in the first half of the year, the second busiest since S&P Dow Jones Indices began tracking the data in 1998. (Bloomberg)
 

Time to Go Skiing


US stocks are higher in early trading, following the Dow’s first back-to-back triple-digit losses in three months. The blue-chip average is up 3% on the year. (CNBC)

A staggering 43% of companies have experienced a data breach in the past year, up 10% from the year before. The absolute size of the breaches is increasing. In January, 40% of South Koreans—a total of 20 million people—had their personal data stolen and credit cards compromised. (USA Today)

US regulators are investigating whether the way bond giant PIMCO values its bond holdings may artificially boost returns of its Total Return Fund. This comes as the bond fund had net outflows of $830 million in July, marking its 15th straight month of outflows. (Wall Street Journal)

Total mortgage applications for the week fell 4.1%. Applications to refinance a loan fell 7% and are down 31% from a year ago. Applications to purchase a home were down 0.3% for the week and down 16% from a year ago. (Mortgage Bankers Association)

Ski season is just around the corner and publically traded Vail Resorts is out with earnings.  The company says season pass sales are up 18% from last year.  Last year skier visits at their resorts were up 10.2%. (PR Newswire)

Choo-Choo!


Equity markets are coming off their biggest drop in nearly two months.  This morning stocks are lower in early trading. (CNBC)

After four consecutive months of gains, existing-home sales slipped in August as investors paying in cash retreated from the market. Total existing-home sales decreased 1.8% to an annual rate of 5.05 million. Total housing inventory declined 1.7% to 2.31 million existing homes for sale, which represents a 5.5-month supply.  Unsold inventory was 4.5% a year ago. (Market Wired)

Railroads traffic is booming.  Oregon railcar maker Greenbrier, has received orders for almost 39,000 railcars, valued at $3.72 billion, since September of 2013. (Oregon Business Mag.)

A statistic that could have tremendous economic implications -- More U.S. millennial women, those born after 1980, are holding off on motherhood.  Fewer teens than ever had babies last year -- 26.6 per 1,000 women, down 57 percent since 1991. For women 20 to 24 years old, the birth rate also reached a record low, while a decline continued for those 25 to 29 years old. (Bloomberg)

This is something Oregon would love. Starbucks is testing a latte that it says has the "savory toasty malt" flavor of a foamy mug of stout. The "Dark Barrel Latte" is being tested in a handful of stores in Ohio and Florida. (Associated Press)
 

Sears One Foot in the Grave?


Sears bid to sell their Canadian operations for $750 million has failed and that is bad news for the declining icon.  The funds for the sale was hoped to be a near-term cash infusion for the company.  The corporate parent of Sears and Kmart was forced last week to take out a $400 million loan as it prepares for the crucial holiday shopping season. (New York Post)

More than 20% of Americans laid off in the past five years are still unemployed, and one in four who found work is in a temporary job. Despite the sharp drop in long-term unemployment recently, many people out of work at least six months are struggling to recoup their former wages and lifestyles. Those idled for years face an even tougher road back to employment. (USA Today)

United Airlines says it will offer flight attendants up to $100,000 in severance if they leave the company.

The lump-sum payments will be offered in order of seniority to some of United's 23,000 flight attendants. United says the early-outs will help it match staffing to its flight schedule and produce a labor contract with the union. (Associated Press)

Anheuser-Busch InBev, the world's largest beer maker by volume, is reported to be preparing to buy SABMiller.  A merger between the two would create one company that controls nearly a third of the world's beer supply. Bud Light is the largest seller of beer in the world producing some 5.28 billion liters.  (Washington Post)
 

Good Jobs Number


US stocks are higher building on the Dow’s record close Wednesday after the Fed decided not to change its guidance for keeping interest rates low. (CNBC)

Last week the financial media was casting, what we thought was unwarranted, doom and gloom as the weekly jobless claims number took a small jump upward. This week we were proved right as the weekly jobless claims fell to 280,000, its lowest level since May 2007.  (Fox Business News)

ConAgra Foods, with the Hunt’s, Swiss Miss and Hebrew National brands, reported quarterly profits down almost 17% from last year.  Despite the decline the company sees improving business fundamentals. (Business Wire)

Two-thirds of workers recently surveyed by CareerBuilder said they don’t aspire to leadership or management positions. Only 7% said they’re aiming for senior or C-level management. Reasons for this lack of career drive is that a majority of respondents say they’re satisfied with their current job. Others say they don’t want to sacrifice their work life balance for anything more taxing. Seventeen percent say they don’t have the necessary education to move up in their careers. (The Fiscal Times)

The US dollar has been climbing for 10 weeks, marking its longest rally in 17 years, spurred by expectations for rising interest rates next year and easing by other major central banks. A strengthening dollar is good for the consumer making imports cheaper, but could be bad for jobs as the price of our exports climb. (Wall Street Journal)
 

Lots of Earnings News


US stocks are little changed as we await the Fed’s updated policy statement and Fed Chairman Janet Yellen’s afternoon pres conference. (CNBC)

Once a tech icon, Sony, warned of a much-deeper-than-expected loss and said it would not pay a dividend this business year for the first time since 1958.  The company is now predicting a $2.15 billion net loss for the year. (Reuters)

Microsoft increased their dividend by 11% to 31 cents per share, which is in line with the software company's revenue growth last year and half of last year's 22% increase. Microsoft has a bulging shack of cash, which increased 11% over the past 12 months to $86 billion.   (Reuters)

General Mills the maker of Cheerios, GoGurt and Toaster Strudel, says quarterly profits fell 13% on sales of $4.27 billion. The company says North American manufacturing and distribution streamlining are expected to generate $100 million in cost savings by 2017. Plant shutdowns and worker firings are the most likely actions. (Yahoo Finance)

FedEx reported a 24% increase in quarterly profit as the world's No. 2 package delivery company benefited from higher volumes in both its express and ground businesses. Revenue increased to $11.7 billion from $11.02 billion a year ago. (CNBC)

Inflation in Check at Producer Level


US stocks are lower ahead of today’s start to the Fed's two-day meeting. Investors expect a policy statement language tweak, which could signal when interest rate hikes might begin. (CNBC)

The August producer price index (PPI) is unchanged, following a 0.1% increase in July. The ex-food and energy rate increased 0.1% after being up 0.2% in July. (Associated Press)

They must be listening to Financial Focus Radio! The California Public Employees' Retirement System, the nation's largest pension fund, is dumping its hedge fund program to reduce costs and complexity in its investment portfolio. The pension fund will liquidate 24 hedge funds and six hedge fund-of-funds that are part of its Absolute Return Strategies (ARS) program. The investments are valued about $4 billion. (CNBC)

Job openings in July held close to a more than 13-year high, showing companies in the U.S. will probably pick up the pace of hiring. The number of positions waiting to be filled fell by 2,000 to 4.67 million in July from 4.68 million in the month before, which was the highest since February 2001, the Labor Department reported. Some 2.52 million people quit their jobs in July, the highest since June 2008 and up from 2.48 million the prior month. (Bloomberg)

Kids pay attention. A high school graduate will earn almost $500,000 more than a dropout over the course of a lifetime, and a university graduate will earn some $800,000 more than a college dropout. (US Chamber)

Nearly half of the people who exploit the finances of elderly Oregonians are members of their own families. Financial exploitation allegations in Oregon increased by 18% between 2012 and 2013. The study revealed that bank employees and family members of victims were the most likely to report financial exploitation. (Oregon Live)

Oil Continues Decline


A new survey from the National Foundation for Credit Counseling found 1 in 5 people could not make ends meet without the use of credit. Another 22% of respondents said they would have to make significant lifestyle changes if asked to live on cash only. “Many people have built a lifestyle their income won't support and rely on credit to supplement their income," said Gail Cunningham, spokeswoman for the NFCC, in an email. "This is a recipe for disaster, as the party has to end at some point, and when that day comes, it will arrive in the form of an unmanageable debt load." (Bankrate.com)

The world’s largest bond mutual fund, Pimco Total Return Fund suffered its 16th month of outflows.  Investors pulled $3.9 billion from the fund in August, which brings the Total Return Fund's net cash withdrawals to almost $70 billion since May 2013.  The run on the fund has come as returns have suffered.   Outflows can bring even more poor performance to those investors who remain. (Reuters)

US regulators have issued rules for banks to hold enough easy-to-sell assets to keep them afloat during a financial crisis. The Federal Reserve says big banks will need to hold a total of about $2.5 trillion in highly liquid assets by 2017.  Currently banks hold about $100 billion short of that. (Associated Press)

Around 1577 Expatriate Americans have renounced their US citizenship during the first half of the year, a record pace, a lot of them because of increasingly onerous tax-filing requirements. The majority of expats are based in Europe, but growing numbers live in the Asian financial hubs of Tokyo, Singapore and Hong Kong. Around 6.32 million Americans (excluding military) live abroad. (CNBC)
 

Retail Sales Up .... No Inflationary Pressure


August retail sales increased 0.6%.  This is a bounce back from a weak performance in July. August import and export prices were down 0.9%, showing no inflationary pressure. (Associated Press)

Darden Restaurants reported a quarterly loss of $19.3 million as same-restaurant sales fell 1.3% at its Olive Garden chain, which contributes about two-thirds to profits. The company has been reinventing itself over the last year as activist investors push for more profitability. (Reuters)

The over 124 million single Americans make up more than half of the adult population for the first time since figures were compiled. In 1976, it was 37.4% and has been trending upward since. Over 50% of those single are 16 years or older. (Bloomberg)

The good news is that Americans are saving more for college, but the average amount wouldn't come close to paying the bill.  The average college savings is now worth about $20,671. The average cost for a four-year public school, including room and board, is about $18,391 a year. (Associated Press)

Millennials are shying away from credit cards with than six in 10 people ages 18 to 29 not having even one in their wallets.  But their determination to say no to credit cards can shoot them in the foot because they're missing out on the chance to build their credit scores. (USA Today)

Oil and Gold Take a Beating


World stock markets are lower after President Barack Obama put America back on a war footing. (NY Times)

Troubled electronics icon, RadioShack reported its 10th straight quarterly loss and is seeking to raise capital. The company posted a loss of $137.4 million as sales fell 22%. (Reuters)

US foreclosure activity jumped 7% in August, up for the second consecutive month.  Banks have started the foreclosre process on more properties and scheduled more housing auctions, says RealtyTrac. Foreclosure activity is down 9% from a year ago.

McDonald's may be looking to serve McBrunch. The fast-food giant has filed a federal trademark registration for the term. This comes as their same store sales have declined for four straight months.  (USA Today)

With 104 days till Christmas Wal-Mart has released its top 20 toy list.  Making the list was rebooted classic brands, such as Mattel's Barbie Glam Camper and Hot Wheels Street Remote Control Flying Car. (CNBC)

Get More For Less


US stocks are near the flat line in early trading, after the S&P 500 and Nasdaq posted their biggest drops in over a month. The S&P 500 is down 5 of the last 6 trading sessions. (CNBC)

McDonald’s same store sales fell 3.7% in August as its U.S. slump continued for the fourth straight month.

McDonald’s, the world’s largest restaurant chain, posted the worst same-store sales decline in more than a decade, hurt by sluggish demand in the U.S. and a health scare involving a Chinese supplier. (Bloomberg)

Total mortgage applications fell 7.2% last week according to the Mortgage Bankers Association. The index is now at its lowest level since December of 2000. Applications to refinance mortgages decreased 11% and applications to purchase a home fell 3%. Purchase applications are now 12% below where they were one year ago.  In an interesting twist the interest rate for 30-year fixed-rate mortgage with conforming loan balances ($417,000 or less) is 4.27%, while a 30-year fixed-rate mortgage with jumbo loan balances (greater than $417,000), is 4.15%. Historically, jumbo loans carry higher interest rates, but lenders today are charging borrowers more for loans backed by Fannie Mae and Freddie Mac (conforming loans) to make up for higher fees imposed by the government-sponsored entities and for higher risk. These are called credit "overlays."

Powdr Corp., owner of Mt. Bachelor Ski Resort, has agreed to pay a $17.5 million bond to maintain access to the terrain of its Park City Resort.  The company had long rented access to the resort terrain for $155,000 a year, but in 2011 that lease lapsed. (CNBC)
 

Waiting on Apple


US stocks look to move higher in early trading, ahead of today’s big Apple product announcements. The S&P 500 has lost ground in four of the past five sessions. (CNBC)

Annie’s, the maker of that organic bunny mac-n-cheese, is being purchased by General Mills for about $820 million. That’s a 37% premium over Monday’s closing price. Annie’s went public just over two years ago. (Reuters)

The auto industry is roaring back to life and Ford Motor CEO warned lenders and consumers not to fall back on old habits. His comments come as six- and seven-year car loans are becoming more common, along with incentives and discounts to get people to buy vehicles. Lenders are also relaxing the most stringent lending standards adopted after the 2008 financial crisis. (Yahoo Finance)

The National Federation of Independent Business, small business optimism index edged higher in August as more owners expect business conditions to improve and plan to increase capital spending. Eight of the index's 10 components either improved or showed no change. (Reuters)

Think things were bad here?  Spain’s housing prices rose for the first year-on-year increase since 2008.  That is six years.  Housing prices have declined 35% in Spain as a whole over the past six years. (Wall Street Journal)

Economy Adds 142,000 Jobs


The US jobs report is out and it says the US economy added 142,000 jobs in August. That is the smallest gain since December 2013. That breaks a six month streak of over 200,000 in job gains.  Wages were up 0.2%.  The unemployment rate stands flat at 6.1%. (Fox Business News)

Starbucks is opening two new types of stores aimed at capturing the growing demand for upscale reserve coffee and an "express" store offering speedy service. The move comes as Starbucks faces growing competition from high-end craft coffee sellers, as well as from fast-food chains. (Reuters)

According to the Federal Reserve the U.S. economy expanded at a "moderate" pace in recent weeks, with the auto industry showing strong growth and banking conditions improving. Essentially all regions of the country reported difficulties finding certain types of skilled labor, citing information technology, truck drivers and construction workers as some of the occupations with shortfalls. (Reuters)

Factory orders rose 10.5% in July, the biggest one-month increase on record going back to 1992.  Orders for motor vehicles and parts rose 7.3% reflecting continued strong consumer demand for new cars and trucks. Demand for machinery was down 1.2% and orders for computers and other electronics products fell 14.7%. (Associated Press)

An Economic Buffet


Lots of economic data today.  It will almost certainly have some impact on the markets.  The S& 500 has started each day higher only to close lower this week.  Will it be a repeat today?  (Fox Business News)

US employers plan to cut about 40,000 jobs in August, down 21% from last August.  Through August job cuts totaled 332,931 this year, down 4% from the 347,095 cuts announced in 2013. Job cuts were heaviest in the technology sector. (Challenger, Gray & Christmas)

The ADP jobs report says the US economy added 204,000 private sector jobs in August.  Additions were across all sectors of the economy.  Small businesses added 80,000 jobs, their first strong performance since the recovery began. (CNBC)

New unemployment claims were up 4000 this week to 302,000. A strong number and at its lowest level since June of 2007. (CNBC)

US productivity was up 2.3% last month.  That was a little weaker than anticipated but still strong.  Labor costs were down 0.1% showing no wage inflation. (Bloomberg)

US consumer sentiment rose in August and an index of current economic conditions hit its highest level since July 2007.  Consumer confidence rebounded in late August due to a positive reassessment of prospects for the national economy,. (Thomson Reuters/University of Michigan)
 

Cash and School


The St. Louis Federal Reserve published a paper blaming the low level of inflation in large part on consumers and their "willingness to hoard money." There is lots of cash sitting around. Banks have put away close to $2.8 trillion in reserves, and households are sitting on $2.2 trillion in savings—about a 50% increase over the past five years. (CNBC)

Harvard, with the world's largest university endowment, is still seeking to recover from a 27% investment loss incurred during the financial crisis.  So Harvard alumni are upset about paying endowment management $132.8 million in salaries, bonuses and benefits last year, up from $63.5 million in 2010. The endowment management company, oversees the university's $32.7 billion endowment, employs 324 people, up 19% from 2009. (Bloomberg)

Back to school and parents are worried.  Nearly two-thirds of parents with children ages 15 to 17 worry that college costs will jeopardize their ability to save for retirement. About half of parents say they don’t have a plan to pay off their children’s student loan debt. Moral to the story – don’t jeopardize your retirement to put your kids through college and it is your kids debt not yours. (Chicago Tribune)

U.S. banks' are lending money as loan balances hit $8.11 trillion in the second quarter, marking a 2.3% jump from the first quarter, the biggest quarter-over-quarter increase since late 2007, and the first time U.S. bank lending has surpassed $8 trillion. (BAI Research)
 

Oil Under Pressure


Unofficially summer is over and kids head back to school. August was the second best monthly performance of 2014 for stocks and Wall Street bulls are hoping for more of the same as September gets underway. The S&P 500 was up over 4% in August and is up almost 8.5% for the year. (CNBC)

The US Dollar reached its highest level in almost a year against the euro as signs of U.S. economic growth and tensions in the Ukraine boosted demand for the currency. This move makes imported goods cheaper for consumers, but makes our exports more expensive and makes life difficult for our manufactures. (Bloomberg)

Oregon outdoor wear maker Columbia Sportswear and the Dallas Cowboys have entered an apparel licensing partnership starting in late spring 2015 through early 2018.  This is the first time Columbia has partnered with an NFL team. They do have relationships with 33 colleges, including Oregon and Oregon State.  (Oregon Live)

A growing number of homeowners are reaching retirement still owing money on their houses. The share of Americans 65 and older with mortgage debt rose to 30% in 2011 from 22% in 2001. Loan balances have also increased, with the median amount owed climbing to $79,000 from $43,400 over the decade. (Bloomberg)

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