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Business News Archives for 2014-08


Longest Winning Streak of the Year


It’s the last trading day of August and then it is on to fall trading. U.S. stocks are higher this morning shrugging off concerns about the Ukraine. The S&P 500 is poised for its first four-week win streak of the year. (CNBC)

The July numbers on personal income and consumer spending show a 0.2% increase in income following a 0.4% rise in June, and a 0.1% decline in spending after June’s 0.4% increase. Both of these numbers were weaker than economists expected. (Associated Press)

U.S. home buyers signed more contracts to buy existing homes in July. Interest rates are lower than they were a year ago, price growth continues to moderate and total housing inventory is at its highest level since August 2012. Sales in the West rose 4.0% from June, but remain 6.0% below July 2013. (CNBC)

The Securities and Exchange Commission has launched a broad examination of alternative mutual funds, one of the hottest and most controversial investment products being offered to small investors. Alternative funds, describe a class of mutual funds that employ hedge-fund-like strategies, including betting on some stocks and against others, trading futures contracts and using derivatives to increase leverage. (Market Watch)

2nd Quarter GDP Even Higher


U.S. stocks are sharply lower in early trading as accusations fly in the Ukraine-Russia crisis. The S&P 500 eked out its 31st record of the year Wednesday, again closing above the 2,000 level. (CNBC)

The second estimate of 2nd quarter Gross Domestic Product shows the economy growing at an annual growth rate of 4.2%, slightly lower than the first estimate of 4.0%. (Bloomberg)

The Labor Department’s weekly jobless claims show 298,000 new claims last week the same as the prior week. (DOL)

Americans are more anxious about the economy now than right after the Great Recession despite an improving economy that is moving closer to full health. Seventy-one percent of Americans say they think the recession exerted a permanent drag on the economy. By contrast, in November 2009, only 49% thought the downturn would have lasting damage. (Associated Press)

Median household income has been on the rise for the past three years, climbing 3.8% to $53,891 in June. Median income remains 3.1% below its June 2009 level of $55,589. Midwesterners experienced a surge in median income since 2011, boosting them back to pre-recovery level. Southerners median income, however, is still 6.1% below its June 2009 level, while Northeasterners and Westerners saw their median income slip about 4%. (CNN Money)

Oregon Leads in Gas Prices


U.S. stocks edged higher on Tuesday to lift the S&P d500 just a hair above the 2,000 mark, its first close above that milestone. Volume this week is very light as lots of people are still on vacation. (Reuters)

US consumer confidence increased for a fourth straight month in August. The consumer confidence index rose to 92.4 from 90.3 in July, compared with 81.8 a year ago. It was the best level for the index since February 2008.  Improving business conditions and robust job growth helped boost consumers' spirit (AFP Services)

That may have been a bubble. Gun maker Smith & Wesson is plunging in trading by 12% after reporting a 19% decline in sales and profits plunged 39% in the second quarter.  The current market environment reflects high inventories resulting from restocking that occurred following a two year surge in consumer buying. (PR Newswire)

The Schiller Park, Ill., bakery, where Twinkies were invented in 1930, will close. The facility was reopened in July 2013 after the company's bankruptcy and acquisition by private equity firms. Originally, Hostess had 11 plants with a union workforce, that number is now three. This closing will affect about 400 employees. (CNBC)

S&P 500 at New Record


Investors watch for an S&P 500 close above 2,000 after breaking that level intraday on Monday.  International concerns in the Ukraine, Syria, and Libya are front and center today.(CNBC)  

Durable goods, a measure of capital spending, was up 22.6% on the back of aircraft delivers.  Take out transportation (read aircraft) and the number was down 0.8%. This is a very volatile number and should be looked at over the long-term. Overtime this number is consistent with a growing economy. (Associated Press)

The Securities and Exchange Commission has warned investors to avoid fraud involving marijuana-related stocks which scammers are promoting to cheat you. Four stock promoters with roots in Washington and Oregon have been charged with securities fraud after manipulating stock, including marijuana-related companies GrowLife and Hemp Inc.  Marijuana is currently a $1.5 billion-a-year industry, and is expected to triple in a few years. Medical marijuana is legal in 23 states. (Portland Business Journal)

Wells Fargo has relaxed its standards for jumbo, non-guaranteed, home loans. The largest U.S. mortgage lender is trying to combat an industry-wide drop in home mortgage volumes. The bank lowered the minimum credit score on these fixed-rate jumbo mortgages to 700 from 720.  This is part of a trend to loosen mortgage criteria that are still tight by historical standards. (Reuters)

Business News


US Stocks saw gains for the 3rd week in a row last week after a slew of better-than-expected economic data.  The S&P 500 is now within 4 points of the 2000 point mark.

Burger King is negotiating to buy the Canadian company Tim Horton's the maker of coffee and donuts.  The deal will be structured as a tax inversion to move Burger King's domicile out of the United States which would save the company billions in taxes.  Shares of Burger King are 14% higher on that news.(marketwatch)

After weeks of rumors Bank of America and the Department of Justice have announced a $16.65 billion mortgage settlement.  The bank has agreed to pay $9.65 billion in cash to the Federal Government and 6 states, while also providing $7 billion in mortgage relief to consumers.  Shares of Bank of America rose on the news as investors think this will be the final settlement the bank will have relating to the financial crisis.(CNBC)

European stocks rallied today after the European Central Bank President, Mario Draghi unexpectedly suggested another round of stimulus may be on the way for the European economy.  That news sent European stocks higher and the Euro lower.(marketwatch)

AAA says that Americans will travel this Labor Day weekend at the highest rate since 2008.  35 million Americans are expected to travel 50 miles or more this weekend with gasoline prices the lowest they have been in the month of August since 2010.  It seems Americans are optimistic about their financial situation this labor day.(yahoo finance)
 

S&P Nears 2000


A potential market mover could be Fed Chairman Janet Yellen’s address before central banker’s in Jackson Hole at 10 am today.  The S&P 500 is less than 8 points away from closing above the 2,000 level for the first time ever. (CNBC)

The US manufacturing sector expanded in August, rising at the fastest pace in more than four years, according to the survey company Markit. "August's survey delivers further evidence that robust manufacturing growth momentum has been sustained through the third quarter," says Tim Moore, senior economist at Markit. (Reuters)

The index of U.S. leading indicators rose in July by the most in four months, as stronger job growth helps power the world’s largest economy.  The Conference Board’s index of U.S. leading indicators, a gauge of the outlook for the next three to six months, climbed 0.9% after a 0.6% gain in June. (Bloomberg)

US corporate-bond issuance is moving toward a record for the third straight year—with nearly a trillion dollars sold by companies so far, as they take advantage of a surprising interest-rate decline to stock up on cash. (Wall Street Journal)
 

Stocks Rise -- Oil, Gold Fall


Equity markets continue to melt up.  The S&P 500 moved up for a third straight session yesterday. The S&P 500 flirted with a record Wednesday, but closed just short of the mark. (Fox Business News)

New applications for unemployment claims fell 14,000 to 298,000.  New applications for unemployment are at their lowest levels as a percentage of the labor force since 1967. (Associated Press)

A once iconic brand continues its slide into the abyss. Sears, also the owners of Kmart, reported its ninth straight quarterly loss.  The second quarter loss widened to $573 million and sales continued their decade-long fall down by 9.7%. (Reuters)

Nobel Prize winner Lars Peter Hansen says uncertainty surrounding regulation is hindering U.S. economic growth. He says, "I think the uncertainty that institutions on what kind of regulatory environment there is going to be in the next few years is contributing to caution … … in a way that is going to be counterproductive. I think clarity in policy is really critical … ,". (CNBC)

As the world continues awash in oil it is moving down 67 cents to $92.78 barrel. The U.S. is pumping the most oil in 27 years, adding more than 3 million barrels of daily supply since 2008. The U.S. imported 7.2 million barrels a day of crude in May, a 26% drop from the same month in 2008 when oil prices spiked. (Bloomberg)

Business News


Markets continued their upward March on Thursday as it seems to put international worries in the rearview mirror.  Not even poor economic data from Europe seems to put a damper on things. (Seeking Alpha)

Nordstrom reported profits 2% higher during the latest quarter, compared to a year earlier. Sales were $3.3 billion an increase of 6.2% over last year. On July 31st Nordstrom announced it will acquire Trunk Club, a personalized clothing service for men. The Company will acquire Trunk Club for $350 million in Nordstrom stock. (Business Wire)

Oil tumbled 2% on Thursday, as European economic contraction highlights weak demand, meanwhile supplies are ample despite international conflict. U.S. crude inventories rose by 1.4 million barrels last week. Crude output is expected to rise, with 2014 U.S. output at 8.5 million barrels per day and 9.3 million barrels per day for 2015, which would be the highest annual average production level since 1972. (Reuters)

U.S. auto loans jumped to the highest level in eight years last quarter, fueled by big increases in lending to risky borrowers. Banks and other lenders issued $101 billion in new auto loans in the second quarter. Total outstanding auto loans rose to $905 billion during the quarter. Auto loans are the third-largest source of Americans' debt, after mortgages and student loans. Mortgage debt actually declined in the second quarter to $8.1 trillion while student debt rose to $1.12 trillion. Americans have $669 billion on their credit cards.  (Associated Press)
 

Business News


The number of job openings Rose to 4.7 million in June, up 100,000 from the prior month. This is the biggest number of Job opening since February 2001. Job openings have increased 17.6% over the last 12 months. (associated Press)

The national Federation of Independent businesses small business optimism index rose to 95.7 last month. While improving this index is still five points below the 35 year average. Small business owners are most concerned about government overregulation and taxes. (cNBC)

Australia plans to export more iron ore this year than any nation ever and that is driving up shipping costs by 80%.  Increase sales from Brazil before year end means freight rates could go even higher. Miners will ship an extra 97.8 million metric tons from Australia, equal to more than 600 cargo ships hauling the ore. (Bloomberg)

A new wealth gap is opening among US corporations, where cash holdings are growing more concentrated. eighteen American businesses hold 36% of corporate wealth in 2013, up from 27% in 2009. The top 1% of multinationals, includes Microsoft, Google, Coca-Cola, Apple and forward, that reap a big share of profits from non-US sales.  (Bloomberg)
 

Business News


On Friday the S&P 500 had its best day in almost 5 months to post a gain for the week. The S&P 500 is down 1.64% for the last month and up 4.5% for the year. (Yahoo Finance)

Households are bouncing back after the recession, With 60% saying they are "doing okay" or "living comfortably". 39% of families have a rainy day fund to cover three months of expenses. But just 48% could cover a $400 emergency expense without borrowing or selling something. (USA TODAY)

McDonald's says it's global sales forecast for 2014 is at risk after a food scare forced it to temporarily withdrawn menu items such as Big Macs and Spicy Mcwings in China. McDonald's said same restaurant sales in Asia-Pacific, Middle East and Africa fell 7.3% in July. Worldwide comparable sales at restaurants open at least 13 months fell 2.5% and US same restaurant sales fell 3.2%. US sales have been down or flat since November 2013. (Reuters)

Boeing and United technologies have been stockpiling titanium from a Russian producer in case international tensions disrupt supplies of the metal critical to building jet airliners. The companies by a substantial share of their titanium the from the Russian producer, the world's largest titanium producer. Internationally four companies provide 90% of the titanium used in the aerospace industry this year, with Russia accounting for 30% of that. (Wall Street Journal)

More Good Economic News


U.S. stocks continued their sell off yesterday and have been a yo-yo so far today.  President Obama’s authorization of airstrikes in Iraq, the Ukraine situation and poor economic information from Europe have investors on edge. (CNBC)

The flight from risky bonds could be gaining momentum. In one of the biggest signs yet of growing concern over risky assets, investors pulled a record $7.1 billion from high yield, otherwise known as junk, bond funds last week and bailed out of equity exchange-traded funds at the most frantic pace in 6 months. (Reuters)

Worker productivity in the second quarter rose 2.5%. Unit labor costs were up 0.6%. (Bloomberg)

That old tired coffee pot at work is becoming a thing of the past. Keurig Green Mountain, maker of the popular Keurig one-cup coffee brewers, reported a 33% rise in quarterly profit as more people opted for its single-serve coffee pods. Sales rose 5.7%. (Reuters)

Mortgage closing costs are rising in Oregon.  An Oregon homebuyer seeking a $200,000 mortgage with a 20% down payment and excellent credit, would pay $2559 in origination and third-party fees, up 7% from a year ago. Oregon's closing costs are the 20th highest in the nation. (Oregon Live)

Join us Saturday at 10 for Financial Focus, Your Smart Money Radio, when we will have our health insurance expert, Don Klippenes of Health Insurance Strategies as our guest.

Labor Market Continues to Improve


The S&P 500 was flat yesterday and today looks to stage an early morning comeback.  Earnings season for companies continues to be strong as profits for the S&P 500 are on track to climb almost 10% from last year.  (CNBC)

Second quarter economic growth in the US is expected to be revised up from 4% after the US trade gap fell 7% as oil imports slow.  The trade deficit is the lowest since January and oil imports are their lowest since 2010. (Bloomberg)

New unemployment claims for the week were down 14,000 to 289,000.  That is another cycle low showing the labor market continues to improve.  (Fox Business News)

Northwest fitness equipment maker Nautilus reported a profit of $600,000 in Q2.  Sales increased 34% with higher sales in both the direct and retail segments. The stock is trading at 52-week highs. (Business Wire)

Northwest Natural Gas saw earnings decline on lower revenues and higher expenses in its gas storage business, while its utility operations generated higher margins. The company posted a $1.1 million quarterly profit down about half from the same time last year. (Market Wired)

Computer chip sales hit a record of $27.6 billion in June.  For the 2nd quarter, global semiconductor sales were up 10.8%. Sales in the first half of the year were up 11.1%.  (Semiconductor Industry Association.)
 

Strong US Economic News - Weak in Europe


US stock markets continued to be in correction mode yesterday as good news was bad, and bad news was even worse. That trend looks to continue today as Russia masses troops on the Ukraine boarder and economic numbers in Europe show they continue to struggle. (Associated Press)

Bend’s newest corporate citizens, Walgreens, says it won’t pursue an inversion plan to re-incorporate in Europe to cut its tax bill. It is buying the remainder of Europe’s Alliance Boots that it doesn’t already own in a $10.1 billion deal. (CNBC)

With mortgage rates still wavering within a tight and historically low range, total mortgage applications rose 1.6% week to week. But no good news for new home building as it was all on the back of refinancing. (Mortgage Bankers Association).

Mondelez International, makers of Oreos and Tang, reported 2nd quarter results reflecting strong growth and margin expansion. Sales were $8.4 billion, down 1.8%, and profits were $957 million, up 10.6%. (Yahoo Finance)

Service industries such as builders and retailers grew in July at the fastest pace since December 2005, signaling the U.S. economy was hitting its stride entering the second half of 2014. The Institute for Supply Management’s non-manufacturing index increased to 58.7, exceeding the highest estimates. (Bloomberg)

Business News


Stocks had their biggest one-day sell off in 6 months yesterday as a combination of bad earnings, bad economic reports, and a default by Argentina on their bonds triggered the sell-off.

The Bureau of Labor Statistics is out this morning showing the US economy added 209,000 jobs in July and the unemployment rate ticked up from 6.1% to 6.2% as more people entered the labor force in search of work.  Economists had predicted the economy to add 235,000 jobs so this report is worse than expected.(marketwatch)

An index that measures the price of labor rose in the 2nd quarter at the fastest pace in over 6 years showing there is some wage inflation starting to present itself, which is sure to get the attention of the Federal Reserve.(CNBC)

GoPro reported their first quarterly earnings report as a public company reporting a $20 million loss sending the stock lower.  Tesla also reported a year over year decline in earnings sending their stock lower.  LinkedIn reported better-than-expected earnings sending their stock 7.5% higher.  And Proctor and Gamble reported a 38% increase in profit as the world's largest consumer product maker continued to cut cost and grow organic sales.(marketwatch)

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