Stocks rose yesterday after the Federal Reserve kept interest rates unchanged and maintains a positive view on the U.S. economy. 

The index of pending home sales decreased 4.9% in December from the previous month, according to the National Association of Realtors.  The index reflects transactions where a contract has been signed but the sale has not yet closed. As a result, the index functions as an indicator for existing-home sales reports in the coming months.
 
The Federal Reserve held their benchmark fed funds interest rate steady yesterday, as the economy stayed on a moderate growth path.  The central bank’s description of the economy was unchanged from six weeks ago: the labor market remained strong, growth was helped by consumer spending, and inflation remained below the 2% target.  The Fed kept its benchmark fed funds rate steady in a range between 1.5% and 1.75%.

The aerospace giant Boeing reported their first operating loss since 1997, losing $2.33/share last quarter.  The stocks traded higher though as investors cheered the new CEO’s turnaround plan.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones

U.S. stocks rose yesterday, steadying after fears over the deadly coronavirus in China sent the S&P 500 to its worst one day drop since October on Monday.

The S&P Case-Shiller 20-city home price index increased 2.6% in November versus a year ago. On a monthly basis, the index ticked up just 0.1% in November compared with October on a seasonally adjusted basis.  At the national level, home prices were up on an annual basis by 3.5%.  Phoenix saw the highest home-price appreciation in the country in November with a 5.9% increase.

Americans began 2020 with the most confidence in the economy since last summer, buoyed by an interim trade deal with China, a soaring stock market and the lowest unemployment rate in 50 years.  The closely followed index of consumer confidence climbed to a five-month high of 131.6 in January from a revised 128.2 in the prior month. It was the strongest reading since last August.

Apple posted record quarterly results for their holiday quarter yesterday afternoon while easily topping expectations for revenue and earnings.  The stock traded higher as the company also gave a revenue forecast for the current quarter than came in ahead of the consensus view.  Apple generated net income of $22.24 billion up from $19.97 billion in the year-earlier quarter. 

With Northwest Quadrant Wealth Management, I'm Tyler Simones

Globally stocks tanked yesterday after more cases of the coronavirus were confirmed over the weekend, ratcheting up worries over the virus’ impact on the global economy.

Sales of new U.S. single-family homes unexpectedly fell in December, likely held down by a shortage of more affordable homes, but the housing market remains supported by lower mortgage rates.  The Commerce Department reported new home sales slipped 0.4% to a seasonally adjusted annual rate of 694,000 units last month, with sales in the South dropping to a one-year low. It was the third straight monthly decline in sales.

Boeing has secured more than $12 billion in financing from more than a dozen banks as the industrial giant shores up their balance sheet amid the nearly yearlong grounding of the 737 Max following two fatal crashes.  Boeing is expected to detail the rest of their turnaround strategy when the report earnings on Wednesday.

Disney, McDonald’s, Starbucks and other U.S. companies with significant footprints in China are suspending operations and instituting travel restrictions for employees as they respond to the outbreak of the coronavirus.

With Northwest Quadrant Wealth Management, I'm Tyler Simones

Stocks and crude oil tumbled last week, and havens including the Yen and Treasuries jumped, as fears deepened about the rising impact of the deadly coronavirus.
 
U.S. private sector companies indicated a faster expansion of business activity in January, with the pace of growth accelerating to a ten-month high. The upturn was driven by a sharper increase in service sector output, as growth of manufacturing production was unchanged. Adjusted for seasonal factors, the  Purchasing  Manufacturers Index posted 53.1 in January, up from 52.7 in December, to indicate the quickest rise in output since last March.
 
US Stocks had their first negative week of the year last week.  The sell-off was triggered by fears China’s coronavirus will spread outside its borders and impact the world economy.  Investors are also focused on other factors in the coming week— the Federal Reserve’s meeting Tuesday and Wednesday and earnings reports from 135 S&P 500 companies including Apple.

Intel crushed revenue expectations for the fourth quarter by about $1 billion and sent its stock to a new post-dot-com-boom high, but the company didn’t get a ton of credit from analysts.  Intel remains a controversial name on Wall Street as the chip giant deals with production challenges and tougher competition from Advanced Micro Devices.

With Northwest Quadrant Wealth Management, I'm Tyler Simones.

John Stumpf, the former chief executive of Wells Fargo, has agreed to pay $17.5m as part of a civil settlement with the Office of the Comptroller of the Currency, which also charged or settled with seven other former senior executives of the bank. The enforcement actions announced on Thursday by the US banking regulator related to the fake accounts scandal at Wells that emerged in 2016 and continues to haunt the bank.    Mr Stumpf, who was also the bank’s chairman, resigned in 2016 after leading the bank for nearly a decade. (WSJ)

A powerful rebound in Intel’s data center division drove a stronger than expected recovery in the final quarter of last year, fueling a rally of as much as 7 per cent in the US chipmaker’s shares in after-market trading on Thursday.  Intel’s recovery, after three quarters of flat or declining revenues, provided one of the most encouraging indicators yet that a cyclical upturn in the chip sector may be under way. Wall Street had anticipated a recovery in the sector for much of last year.  Intel’s revenues jumped 8 per cent in the fourth quarter, to $20.2bn, compared to analysts’ expectations for growth of 3 per cent. (FT)

Xerox escalated its $33bn hostile takeover fight for control of HP on Thursday, proposing a new set of directors for the printer and computer maker’s board in an attempt to force HP to the negotiating table.  The tactic, a common weapon in the arsenal of activist investors, is an unusually aggressive move for a company trying to accomplish a merger.  HP has so far rejected overtures from Xerox, warning that it has “significant concerns” about the health of Xerox’s business and is skeptical of its rival’s ability to find $2bn of cost cuts if the two companies were to combine. (FirstFT)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

Having reached a phase one trade deal with China, it seems American attention is turning to Europe. Speaking at the World Economic Forum in Davos, Switzerland this morning Commerce Secretary Wilbur Ross said the U.S. was still considering slapping levies on European auto imports even as it hopes for a “peaceful resolution” of differences. This follows comments from President Donald Trump yesterday where he said Europe is “more difficult to do business with than China.” The U.S. administration is seeking to complete a new trade deal with the bloc ahead of the 2020 election in November. (Bloomberg)

Procter & Gamble’s long-struggling personal grooming business has produced higher quarterly sales despite men’s tendency to shave less, contributing to a broader turnaround at the household products company behind Gillette.  Razors have in recent years been among the weakest performing parts of the consumer goods group’s portfolio of brands, which also includes Head & Shoulders shampoo, Ariel laundry detergent and Bounty paper towels.  Net earnings for the quarter rose 16 per cent to $3.74bn.  

There will be some interest in earnings today for American Airlines Group Inc. and Southwest Airlines Co. as investors will get a look at the hit the companies are taking from the grounding of Boeing Co.’s 737 Max aircraft. Intel Corp., Comcast Corp. and Union Pacific Corp. are among the other companies announcing results. (Refinitiv)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

Stocks dropped across the globe following a big selloff in Asia on concerns that a mysterious coronavirus emanating from China will spread through the region as travel heats up for the Lunar New Year holidays. The disease has already infected 224 people and killed six, and is reminiscent of the SARS epidemic that subtracted an estimated 0.8 percentage point from GDP growth in China in 2003. The World Health Organization will meet tomorrow to discuss whether to declare the outbreak an international public health emergency.  (SA)

The world's political and business leaders, plus the usual smattering of celebrities, are gathering today to kick off the World Economic Forum in the Swiss Alpine resort of Davos. The official theme of the 2020 meeting is "Stakeholders for a Cohesive and Sustainable World." According to forum founder and executive chairman Klaus Schwab, "business has now to fully embrace stakeholder capitalism, which means not only maximizing profits, but use their capabilities and resources in cooperation with governments and civil society to address the key issues of this decade." (FT)

While today’s economic slate for the U.S. is blank, there was some good news from Europe where a German survey showed investor confidence rising to the highest level in four years. It is a big day for earnings with Netflix Inc.’s results expected to give a clear view of how the company is faring against new competition from Disney+. International Business Machines Corp., Haliburton Co. and United Airlines Holdings Inc. are among other companies announcing performance. (Bloomberg)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

U.S. stock and bond markets will be closed Monday in observance of the Martin Luther King Jr. holiday, coming as Wall Street absorbs a record-setting run-up for equities.  Meanwhile, on the U.S. commodities markets, there will be no regular trading or settlements, including crude oil and gold.  However, Brent oil, the international benchmark, conduct regular trading today. (Marketwatch)

Apple, Microsoft, Alphabet (which last week joined the $1tn market-capitalization club) Facebook and Amazon account for almost a fifth of the S&P 500 index and are responsible for a quarter of the broad market’s return over the past 12 months. Just how long this remarkable run can last is currently dominating the market conversation.  History has shown the largest stocks duly slide down the rankings as they enter a period of natural underperformance after reaching an expensive valuation that proves far too rich for most investors. (FT)

World leaders, chief executives, thinkers and celebrities are gathering in the Swiss mountain town of Davos for the World Economic Forum’s annual meeting.  The event, which begins on Tuesday, has earned a reputation for high-altitude pontificating as the global elite gather to pitch their takes on topics picked by WEF founder Klaus Schwab, from deglobalization to the fourth industrial revolution. This year, as the WEF marks its 50th anniversary, a new urgency hangs over the Alpine town. The prospects for trade and global economic growth, tech companies (feted at previous meetings but now in regulators’ sights), the future of multilateralism and the geopolitical order all face growing challenges.

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

US Stocks hit fresh record highs yesterday after investors digested solid data on the U.S. economy.
 
The number of Americans who applied for unemployment benefits in early January fell for the fifth week in a row, giving a clean bill of health to strong U.S. labor market as 2020 got underway.  Initial jobless claims declined by 10,000 to 204,000 in the seven days ended Jan 11th.

In another good sign for the U.S. economy, most retailers posted higher sales in December to finish out the holiday season on a strong note.  Retail sales increased 0.3% last month, just a tick below forecast.  Every major group except auto dealers and department stores reported stronger sales.

The rapid increase of student loan debt has slowed over the past few years, but individual borrower balances aren’t going down mostly because hardly anybody is paying down their loans.  Total indebtedness over the past year or so has stopped its meteoric rise, according to a study that Moody’s Investors Service. Nevertheless, the study showed a number of factors are constraining borrowers from lightening their loads. Outstanding loans total more than $1.6 trillion, more than doubling over the last decade and tripling since 2006.

With Northwest Quadrant Wealth Management, I'm Tyler Simones

US Stocks closed marginally lower yesterday after reports China tariffs will remain until after 2020 election.
 
JPMorgan Chase and Citigroup reported better-than-expected fourth-quarter earnings, while Wells Fargo fell well short of profit forecasts.  JPMorgan and Citigroup stock’s rose while Wells Fargo stock sold off.
 
Higher prices for gasoline, health care and rent spurred another increase in the cost of living in December, capping off the biggest annual advance in inflation in eight years. But price pressures more broadly remained largely muzzled.  The consumer-price index rose 0.2% last month.  The increase in the cost of living in the past 12 months rose a few ticks to 2.3%.

Small-business owners' confidence in the U.S. economy declined in December, though owners benefited from strong consumer spending as well as federal tax and regulatory relief, according to the National Federation of Independent Business.  The NFIB Small Business Optimism Index's December reading was 102.7, down two points from the prior month. The NFIB survey is a monthly snapshot of small businesses in the U.S., which account for nearly half of private-sector jobs

With Northwest Quadrant Wealth Management, I'm Tyler Simones
 

Stocks traded higher yesterday, resuming the rally that started last week amid news the U.S. will remove China from a list of currency manipulating countries, increasing optimism ahead of the signing of a key trade agreement.
 
It’s no secret that a handful of tech giants have been dominating the stock market, but their leadership has reached a level that is raising eyebrows on Wall Street as being unsustainable.  The top five U.S. companies — Apple, Microsoft, Alphabet, Amazon and Facebook — now make up 18% of the total market capitalization of the S&P 500, the highest percentage in history, according to Morgan Stanley.

The U.S. fiscal deficit topped $1 trillion in 2019, the first time it has passed that level in a calendar year since 2012, according to Treasury Department.  The budget shortfall hit $1.02 trillion for the January-to-December period, a 17.1% increase from 2018, which itself had seen a 28.2% jump from the previous year.  President Trump had vowed that his stimulus policies, including massive corporate tax cut and aggressive deregulation, would help stem the red ink coming from Washington, but it has only increased. As deficits have swelled, so has the national debt, which is now at $23.2 trillion.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones

US Stocks traded higher last week with the Dow crossing 29,000 intra-day for the first time ever.  The Dow first crossed 28,000 just 37 trading days ago.
 
The US economy added 145,000 jobs in December, capping a decade of solid job creation.  The US economy has added over 2 million jobs per year for the last 10 straight years.   The government’s monthly jobs report, released Friday by the Bureau of Labor Statistics, also showed that the nation’s unemployment rate remains unchanged, at a 50-year low of 3.5 percent.
 
After announcing last month that a phase one trade agreement with China would be signed this Wednesday January 15, Trump said in an interview last Thursday that the deal could now be signed “shortly thereafter,” and all signs still point to a resolution at some point this week.
 
Ford Motor's China vehicle sales fell for a third consecutive year, by 26.1%, as it battles a prolonged overall sales decline in its second-biggest market.  The U.S. automaker delivered 146,473 vehicles in China in the fourth quarter, down 14.7% year-on-year.
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones

Mercedes-Benz successfully defended its title as the world's best-selling luxury-car brand in 2019, topping archrivals BMW and Audi for the fourth year in a row. Mercedes sales increased 1.3% to 2.34M vehicles, making it the highest annual sales volume in its history. (SA)

Even with U.S. energy production at an all-time record, seven different U.S. refineries are on the block now, accounting for about 5% of U.S. crude oil processing capacity, according to data compiled by Reuters. The properties are having trouble finding bidders because of unfavorable locales, worries about falling margins, and the coming restart of nearby facilities in the Caribbean. There's also pressure from new international shipping fuel regulations, known as IMO 2020, and U.S. renewable fuels standards that require refineries to blend in biofuels. (Bloomberg)

Employers added 145,000 jobs in December and unemployment stayed at a 50-year low of 3.5%, capping a tenth straight year of payroll gains.  Private-sector wages advanced 2.9% from a year earlier, the smallest annual gain since July 2018. And revisions showed payrolls for November and October were revised down by a net 14,000.  U.S. employers have added jobs for a record 10 years, the longest stretch in 80 years of data. That consistency, alongside low unemployment and modest wage gains, points to steady growth heading into 2020. (WSJ)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

China has confirmed that Vice Premier Liu He will travel to Washington next week to sign the phase one trade deal with the U.S. After that, there’s round-two to look forward to. When President Trump announced the date on Twitter earlier this month he stated his intention to visit Beijing to start negotiations on the second phase. Meanwhile, China intends to open up oil and gas exploration to foreign companies, in an attempt to ease commercial frictions with the U.S.

The World Bank said that the global expansion will accelerate slightly to 2.5% in 2020, down from a previous 2.7% projection. In its latest Global Economic Prospects report the lender warned that conditions remain fragile as it lowered euro area and China estimates for this year. There was some good news from Germany this morning as industrial production rebounded, raising hopes the sector may be ending its protracted slump. (Bloomberg)

Grubhub, the food-delivery provider, has tapped financial advisers for help with a review of potential moves that could include a sale of the company or an acquisition, WSJ reports. Also on the menu is what to do in case an activist shows up. Going public nearly six years ago, Grubhub's market cap is now valued at roughly $5B, down from a peak of more than $13B just over a year ago - before competition from other delivery startups heated up.  Expect more consolidation in the food-delivery business to come.  (SA)

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

Global stocks plunged and oil moved higher in the immediate aftermath of the missile attack. However, markets soon pared those losses as hopes rose that the response could lead to a cooling of tensions. Overnight, the MSCI Asia Pacific Index dropped 0.8% while Europe’s Stoxx 600 Index was 0.2% lower by 5:45 a.m. Eastern Time. S&P 500 futures had erased all losses to trade slightly higher, the 10-year Treasury yield was at 1.800% and Brent crude had reversed almost all of its $3-a-barrel surge. (Bloomberg)

Continuing its surge into 2020, Tesla rose as much as 4.7% on Tuesday to carve out yet another all-time high at over $470/share. The extended rally has pushed the company's market cap to the highest ever recorded by a U.S. automaker, topping the $80.81B cap of Ford in 1999 and easily outdistancing the record cap for pre-bankruptcy General Motors or post-bankruptcy GM. Global records? Tesla's market cap still trails Toyota and Volkswagen, which were valued at $231.76B and $98.05B, respectively. (SA)

Results today from Walgreens Boots Alliance, Constellation Brands, and Bed Bath & Beyond will be among the last ahead of the fourth-quarter earnings season, which kicks into full gear over the coming weeks. While profits are expected to fall slightly - capping 2019 as a lackluster year - Wall Street is hopeful that earnings will rebound in 2020, possibly rising 9.6%. That would be the third-best growth rate in the last seven years, helping justify high stock prices and boosting further economic growth.

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

Congress has passed the SECURE Act, which became effective January 1, 2020. Required Minimum Distribution (RMD) and Contribution Age raised from 70½ to age 72. The SECURE Act eliminates the “stretch IRA,” an estate planning method that allows IRA beneficiaries to stretch their distributions from their inherited account. Will allow withdrawals from a 401(k), IRA or other retirement account prior to age 59½ for child birth and adoption cost without penalty.

Spam was introduced more than 80 years ago. For 2019, Hormel reported that Spam had its fifth consecutive year of record sales.

According to YouGov, 36% of millennials polled say that they approve of communism, which is up significantly from 28% in 2018.

Changes in Lattice Semiconductor management continue as board member Brian Beattie resigned effective Dec. 31. He had been on the Lattice board since 2016.That leaves the Lattice board with nine members, five of whom have joined since 2018.

U.S. hop production set a record high above 100 million pounds for the third year in a row in 2019.  At 112 million pounds, the crop was up 5%, according to a report from USDA’s National Agricultural Statistics Service. Oregon production was up 12% at 13 million pounds.

Low global interest rates are here to stay "for the next five to 10 years," which should lead Fed officials to hold themselves accountable to their 2% inflation target, according to New York Fed President John Williams. He also said the Fed's response to inject liquidity into repo markets following a cash crunch in September had "worked exactly as we wanted." "As the level of reserves have been brought back to the appropriate level, we've seen money markets operate very smoothly." (SA)

Citigroup, Mizuho Financial and Bank of America have agreed to provide Xerox with up to $24B in financing for its takeover offer for HP Inc., sources told the WSJ. It's a sign the company is pushing forward with an unsolicited $33B deal that its larger rival had rejected as too low and not in the best interests of its shareholders. Xerox on Nov. 5 made the cash-and-stock offer for HP, whose market value has since risen to almost $30B, making it nearly four times Xerox’s size. (WSJ)

Remember the trade war? While events in the Middle East have certainly taken over investor attention, there was more good news on progress towards getting a phase one deal signed, with China planning to send top negotiator Vice Premier Liu He to Washington on Jan. 15 to ink the agreement, according to people familiar with the matter. The South China Morning Post reported that the delegation changed their schedule after Trump unilaterally announced the signing date, and indicated he’d be willing to seal the deal with China’s President Xi Jinping being present.

With Northwest Quadrant Wealth Management, a Registered Investment Advisor I am Josh Fenili.

US Stocks started the New Year with a bang extending the gains we saw in 2019 with the major indexes hitting fresh all-time-highs yesterday.
 
The number of Americans who applied for unemployment benefits at the end of 2019 fell slightly, showing the pace of layoffs in the U.S. remains near a half-century low. The U.S. labor market is still quite robust even though the economy has slowed. While companies aren’t hiring as many workers, they haven’t resorted to widespread layoffs. They worry they won’t be able to rehire them if the economy speeds up.
 
Once real estate’s sleepiest month, data suggests January could be this year’s home buying hot season — a status historically reserved for April.  Homebuyers are shopping earlier in the year, a trend that began in 2015. Last year, listing views peaked in February: If the trend continues in 2020, January could be the most competitive month for home shoppers, according to economists. 
 
As a decade-long economic boom pushes into 2020, affording a home isn't expected to become much easier for the average American.  The Average American wage earner can't afford to buy a home in 75% of the US. 
 
With Northwest Quadrant Wealth Management, I'm Tyler Simones