Alphabet took the spotlight of yesterday's Big Tech earnings show, rallying as much as 8% AH as ad sales bounced back sharply from a pandemic slump (YouTube pulled in more than $5B alone). While other peers did quite well, the quarterly reports led traders to pull out of the sector. Facebook slipped nearly 3% amid a user decline and "a significant amount of COVID-related uncertainty," though revenues were up more than 20% despite ad boycotts. Amazon also fell 1.5% after predicting $4B in pandemic costs next quarter, while Apple declined 4% as iPhone sales missed estimates due to customers holding off on purchases before the release of the iPhone 12. 

Once one of the most highly valued startups, Juul has been stricken over the past two years by regulatory crackdowns, lawsuits and probes into whether it marketed vaping products to teens. Latest? The e-cigarette maker has lowered its valuation to about $10B, after being valued at around $38B just two years ago when Altria took a 35% stake. Last month, Juul cut more than half its workforce and said it was exploring pulling out of most overseas markets.

Chevron on Friday reported its second straight quarter of losses after revenue during the third quarter fell 32% year over year, hammered by Covid-19.  Amid declining oil prices Chevron said it implemented aggressive cost-cutting measures.  The oil giant lost $207 million during the quarter on revenue of nearly $25bn.

 
The s&p500 is down 26, and the Nasdaq is fown 112. The MSCI international index is down 1/2%.

Oil is down $.11 to $36.06 a barrel, and gold is up $11 at $1879 an ounce.  

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

 Four of the big five - Alphabet, Amazon, Apple, and Facebook- are set to report earnings after the bell. The stocks account for $7T in market value, or nearly 46% of the Nasdaq 100, while the group's scale and influence has made it an outsized target for lawmakers in Washington. The stocks sold off yesterday, each dropping around 5% with the broader market, though they pared back some of those losses in the AH trading session. 

More deals in the chip sector: Marvell Technology is reportedly nearing a deal to acquire Inphi for about $10B, adding to an already record year for chip industry deals. Previous acquisitions: Advanced Micro Devices' $35B takeover of Xilinx, Nvidia's $40B purchase of Arm and Analog Devices' agreement to acquire Maxim Integrated Products for $20.9B. Marvell will pay 60% of the acquisition in stock, with the rest in cash, while an announcement could come as soon as today. Inphi Shares are 40% higher on the news.

Coming off the worst quarter in history, the U.S. economy grew at its fastest pace ever in the third quarter as a nation battered by an unprecedented pandemic put itself back together. Third-quarter gross domestic product, a measure of the total goods and services produced in the July-to-September period, expanded at a 33.1% annualized pace.  Initial jobs also came in a bit better than expected at 751,000.  

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

US Stocks were lower for a third straight day yesterday led lower by the stocks of companies most sensitive to the economy closing down again because of an uptick in COVID cases.

A slew of large US companies reported quarterly earnings, including Dow components 3M and Caterpillar. Caterpillar reported a steep drop in year-over-year earnings and 3M slid 3.1% even after posting stronger-than-expected earnings and revenue.  170 S&P 500 companies have reported third-quarter earnings so far. Of those companies, 83% have posted better-than-expected earnings.

Shares of Microsoft are higher after the company reported fiscal first-quarter results that were better than analysts had expected.  Microsoft revenue grew 12% on an annualized basis. Revenue from Azure their public cloud division grew 48%.
Strong demand and a limited supply of homes have caused home price gains to accelerate dramatically.  Prices beat expectations, rising 5.7% annually in August, up from 4.8% in July, according to the Case-Shiller National Home Price Index.  Phoenix, Seattle and San Diego reported the highest annual gains among the 19 cities.   Chicago, New York City and San Francisco saw the smallest annual home price gains.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

More than one third of the S&P 500 index components, or 186 companies, are set to report Q3 results this week, including some of the top names in the index. Today's lineup includes manufacturing behemoth's 3M, and Caterpillar, healthcare giants Pfizer, Eli Lilly, and Merck, as well as tech titans Microsoft and AMD.  Earnings this quarter are beating expectations at a greater rate than usual.  

Intensifying its battle with Intel in the data center chip market, Advanced Micro Devices has agreed to buy Xilinx in a $35B all-stock deal. The tie-up would create a combined firm with 13,000 engineers, with a nimble manufacturing strategy that relies heavily on Taiwan Semiconductor Manufacturing. Since taking over AMD in 2014, Lisa Su has focused on data centers that power internet-based applications and services, which have fueled the rise of artificial intelligence and 5G telecom networks.

Not paying any attention to China's recent sanctions, the U.S. State Department has signaled its approval for a potential $2.4B sale of anti-ship missiles to Taiwan. As many as 100 Harpoon Coastal Defense Systems built by Boeing could be shipped. On Monday, Beijing said it would impose sanctions on Boeing's defense unit, Lockheed Martin  and Raytheon over another $1.8B arms sales to Taiwan.  China has not ruled out the use of force to achieve reunification.

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

Bayer is paying as much as $4B for U.S. biotech firm Asklepios BioPharmaceutical, bolstering its pharmaceuticals division as it continues to reel from its acquisition of crops giant Monsanto (and cancer-related Roundup lawsuits). The latest deal, which includes upfront consideration of $2B and potential milestone payments of up to $2B, is a bet on cutting-edge gene therapy, which offers the potential to cure a wide range of often-rare diseases by editing errors in the body's instruction manual.
  
Dunkin' Donuts and Baskin Robbins chains owner Dunkin' Brands  has held preliminary talks to be acquired by Inspire Brands after the NYT reported on the negotiations. Inspire would take Dunkin' private at $106.5 per share, valuing the company at $8.8B, or a 20% premium over DNKN's closing price on Friday. While Dunkin' said "there is no certainty that any agreement will be reached," if successful, Inspire would add the new assets to the Buffalo Wild Wings, Arby's Sonic, and Jimmy John's chains that it already owns. 

The Chinese financial technology giant  Ant Group will raise $34.5 billion in its dual initial public offering (IPO) after setting the price for its shares on Monday, making it the biggest listing of all time. Ant’s valuation based on the pricing will be $313.37 billion, larger than some of the biggest banks in the U.S., including Goldman Sachs and Wells Fargo.

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

Stocks traded higher yesterday on upbeat news on stimulus negotiations, and news that The Food and Drug Administration approved Gilead Sciences’ antiviral drug remdesivir as a treatment for the coronavirus.
Coca-Cola rose more than 1% after the company reported a stronger-than-forecast profit from the previous quarter. CSX and AT&T also traded higher on the back of better-than-expected earnings.

Sales of existing homes rose a higher-than-expected in September to a seasonally adjusted annualized rate of 6.54 million units, according to the National Association of Realtors. Sales were up 21% annually.  Sales could be more robust if there were more homes available. The inventory of homes for sale fell 19.2% annually to just 1.47 million homes for sale at the end of September. At the current sales pace that represents a 2.7-month supply. That is the lowest since the Realtors began tracking this metric in 1982.

The Leading Economic Indicator index an index that measures U.S. business cycles rose in September for the fifth straight month, but its expansion pace further decelerated.  September reading marks the fifth straight month rise for the index, which saw is largest drop ever in March amid the first wave of the coronavirus pandemic. After rebounding in May and June, the indicator has gradually slowed down.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

Stocks alternated between gains and losses yesterday ending lower as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin continue their negotiations on a new fiscal stimulus package.
 
Shares of the electric car maker, Tesla, are higher after the company reported their fifth consecutive quarterly profit.  The company reported that they delivered 139,000 vehicles during the quarter, which is a new record for Tesla.
 
Shares of the social media company Snap are 30% higher hitting a new all-time high after the company reported a surprise profit in the third quarter.
 
United Airlines is testing a digital health pass under a global pilot program seeking to establish a common international standard for COVID-19 test results and eventually vaccine records that could help reopen international borders and eventually global air travel.  The nonprofit initiative, called CommonPass, is backed by the World Economic Forum, and if successful, it could persuade governments to ease the restrictions and quarantines that have slammed air travel. 

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

Stocks rose yesterday after House Speaker Nancy Pelosi signaled Democrats and the White House were making progress in negotiations for a new fiscal stimulus deal.

U.S. single-family homebuilding surged in September, cementing the housing market’s status as the star of the economic recovery, thanks to record-low interest rates and a migration to the suburbs and low-density areas as Americans seek more room for home offices and schooling. Single-family homebuilding, the largest share of the housing market, jumped 8.5% to a rate of 1.108 million units last month.
 
Shares of Netflix are sharply lower after the company reported paid subscriber additions and guidance that sharply missed estimates, with subscriber growth decelerating more sharply than expected over the course of 2020. 
 
Social Security and Supplemental Security Income benefits will increase 1.3 percent in 2021.  The 1.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 64 million Social Security beneficiaries in January 2021.   Retirees’ estimated average monthly benefit will increase by $20 per month, to $1,543 from $1,523 after the 1.3% increase.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

Wall Street was on a wild ride yesterday, with stocks swinging wildly between highs and lows.  Stocks had opened moderately higher on hopes that a stimulus deal might still get done ahead of the election. But it wasn't meant to last.  All three major indexes finished sharply in the red.
 
In a further show of strength for the housing sector, builder confidence in the market for newly-built single-family homes increased two points to 85 in October, further surpassing the previous all-time high of 83 recorded in September, according to the latest NAHB/Wells Fargo Housing Market Index. These are the first two months the index has ever been above 80.
 
ConocoPhillips is doubling down on crude oil by making a major acquisition.  Conoco announced a $9.7 billion all-stock takeover of Concho Resources, a fracker squarely focused on the Permian Basin, the massive West Texas oilfield at the heart of the shale revolution.  The companies said the deal will make the new Conoco the largest independent oil-and-gas company in the United States, with daily production surpassing 1.5 million barrels.

Shares of IBM are lower after the company reported the third consecutive quarter of declining revenue.  The company blamed their exposure to retail and transportation as reasons for the decline.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

Both Dow and the S&P 500 notched their third straight weekly gain and the Nasdaq posted a four-week winning streak last week after the release of strong U.S. consumer data.

Shares of Boeing are higher after Europe’s aviation regulator has declared Boeing’s 737 Max aircraft safe to fly again after it was grounded in March 2019 following two accidents that left 346 people dead. 

The preliminary reading of consumer sentiment index edged up to 81 this month from 80 in September, according to the University of Michigan. That’s the highest level since March, just when the pandemic slammed the U.S. but the index remains well below levels seen at the start of this year.

More than 6 million households failed to make their rent or mortgage payments in September, according to the Mortgage Bankers Association, a sign that the economic fallout from the pandemic is weighing on jobless Americans as Congress stalls on relief measures.

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

Treasury Secretary Steven Mnuchin told House Speaker Nancy Pelosi that the President would weigh in with Senate Republicans if Democrats and the administration agreed a stimulus package. Senate Majority Leader Mitch McConnell rejected that, saying he could not sell a much larger package to his members, and that the Senate would vote on a narrow stimulus plan worth about $500 billion next week. 
 

Wireless communication company Ligado Networks is preparing to pay a whopping 17.5 per cent interest rate in the US bond market this week, the most any company has shelled out to investors since coronavirus struck and the highest rate on any US corporate bond since 2011.  The back-and-forth with investors indicates the scale of financial distress at the Virginia-based company. But it also offers a sign that despite a cramdown in borrowing costs since the Federal Reserve cut benchmark interest rates close to zero, portfolio managers are still showing some discretion in doling out funding.

Morgan Stanley closed out Wall Street’s earnings season on a high, with booming markets driving a 25 per cent increase in third-quarter earnings and fuelling the bank’s calls to be allowed to resume share buybacks. The bank posted net income of $2.7bn for the quarter, far better than predicted by analysts. Revenues of $11.66bn were up 16 per cent year on year.

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

Stocks fell for a second straight day yesterday after comments from Treasury Secretary Steven Mnuchin dampened expectations of a coronavirus stimulus deal being reached before the Nov. 3 presidential election.

United Airlines posted a wider-than-expected third quarter loss as the coronavirus pandemic continued to hammer air travel demand, but the carrier trimmed their cash burn.  The Chicago-based carrier swung to a net loss of $1.8 billion in the three months ended Sept. 30, from a $1 billion profit a year ago.

The share of homeowners four months behind on their mortgage payments hit a 21-year high in August, according to the latest figures from CoreLogic.  The 120-day delinquency rate stood at 1.4%, the highest level since CoreLogic started tracking delinquencies in 1999.The rate includes those homeowners who declared forbearance as a result of the CARES ACT.

With people continuing to ditch mass transit during the pandemic, it’s a good time to be in the business of selling cars online.  Car-selling platform Edmunds said that third quarter sales of new cars and trucks rose 31% from the second quarter. Sales from major automakers such as General Motors, Fiat Chrysler and Hyundai all improved markedly in the third quarter from the second quarter.

With Northwest Quadrant Wealth Management I’m Tyler Simones

Today’s Apple iPhone event has been labeled a "once in a decade" potential launch, and the stock is responding accordingly. Shares are up 2% premarket, following a 6.4% advance on Monday, amid expectations that it will be the first iPhone with full 5G capacity and cheaper than last year's devices. Analysts are predicting four iPhone models. 

Consumers are already filling up their shopping carts as Amazon's Prime Day kicked off today.  Amazon shares rose 4.8% to $3,442 on Monday in anticipation of the event, pushing the stock up over 85% YTD. Due to the coronavirus pandemic, analysts predict the online shopping bonanza will be the biggest in Amazon's history, with revenue expected to jump about 42% Y/Y to $7.5B, according to JP Morgan.

JPMorgan Chase posted earnings that beat analysts’ estimates for the top and bottom lines.  The bank posted third-quarter profit of $9.44 billion.  Rather than building reserves for loan losses, as it had done aggressively in the first half of the year, it actually reduced them by $569 million.  Citigroup also posted earnings significantly beyond analyst expectations.

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

The President’s newfound enthusiasm for a large stimulus package does not appear to be enough to get a deal over the line. The administration is blaming House Speaker Nancy Pelosi for a lack of progress while she called the latest offer a "miserable and deadly failure." White House economic adviser Larry Kudlow said a deal is not essential for the economic recovery, and suggested targeted assistance might be enough. Treasury Secretary Steven Mnuchin is expected to continue talks with Pelosi this week knowing that even if they do come to agreement, there is little chance of getting legislation passed by Congress ahead of the election. 

Financial earnings will dominate the current week as the sector tries to break out of the malaise that made it an underperformer throughout the summer's recovery rally. Trading revenue and bank credit loss estimates will give an indication of the pace of the economic recovery, though the four largest lenders more than doubled their war chests for defaulted loans over the first six months of the year. Among those reporting over the next few days are JPMorgan Chase, Citigroup, Goldman Sachs, Bank of America, Wells Fargo, and Morgan Stanley. 

The EU has been working to make powerful tech companies less powerful, and the bloc is building a list of businesses that are in its crosshairs, FT reports. The "hit list" includes up to 20 of the largest internet companies - based on market share of revenues and the number of users - that will be subject to new and far more stringent rules. New regulations would force them to share data with rivals and make them more transparent on how they collect information. A number of Big Tech names, including Facebook, Apple and Amazon and Google are already under antitrust scrutiny in the U.S., and last week a House subcommittee said Congress should consider breaking up some companies.

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

Stocks were higher yesterday as investors grew more hopeful that lawmakers would reach a compromise on a new stimulus deal. Trump’s illness, as well as a weak September jobs report, highlighted the urgency for further coronavirus aid after a months-long stalemate in Washington.

The parent of Regal Cinemas will temporarily shutter their more than 500 U.S. movie theaters this Thursday, as well as its 127 Cineworld and Picturehouse locations in the U.K..  The theater chain made the decision to close its U.S. and U.K. locations because there are not enough blockbuster movies being released to attract attendees during the pandemic.
Oregon’s rural areas have historically had it worst during the state’s economic downturns, with less access to investment, education and other resources that help regions ride out the bad times and build the foundation for a recovery.  The coronavirus recession is unique, though, and it’s playing out quite differently from past downturns – at least in the early stages.  Job losses in southern and eastern Oregon over the past year are roughly half what they have been in the Portland area. In August, the lowest unemployment rate in Oregon wasn’t in one of the state’s prosperous urban centers but rather in tiny Wheeler County in Central Oregon, at just 4.4%.

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

U.S. stocks fell in volatile trading on Friday after President Trump’s coronavirus diagnosis fueled concerns about the election and a worsening pandemic. Major averages clawed back some of the steep losses after House Speaker signaled aid for the airline industry could be coming soon, perhaps even as part of a much-anticipated broad relief bill. 

Americans grew more optimistic toward the end of September as consumer sentiment reached a six-month high, reflecting more confidence in the U..S. economy after a summer lull.  The final University of Michigan consumer sentiment survey in September climbed to 80.4.  The index now sits at the highest level since the pandemic erupted in March, mirroring the results of other household surveys. Earlier this week the Conference Board said its consumer confidence index also shot up to a pandemic high.

The index of pending home sales rose 8.8% in August as compared with July, hitting a new all-time high according to the National Association of Realtors.  It’s the fourth consecutive month in which the level of Americans signing contracts to purchase homes has risen. Compared with a year ago, contract signings were up 24%.  Tremendously low mortgage rates — below 3% — have again helped pending home sales climb in August.  Pending home sales increased across the entire country, led by a 13% gain in the West.

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

House Democrats passed their $2.2 trillion stimulus plan, which will not progress in the Senate, as talks continue between Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin. While those phone calls and meetings have not produced any breakthrough yet, there remains some small hope of progress as long as they continue. Data released yesterday clearly showed the impact of the ending of the March stimulus plan on incomes, while private economists are cutting their growth forecasts amid the continued failure to find a way forward. (Bloomberg)

Nonfarm payroll rose by 661,000 in September and the unemployment rate was 7.9%, the Labor Department said Friday in the final jobs report before the November election.- marking the first time hiring has fallen below the 1M mark since May - the U.S. has regained about half of the 23M jobs it lost since the start of the coronavirus crisis. The unemployment rate has meanwhile fallen far faster than anyone would have dreamed of six months ago, now down from a pandemic high of 14.7%. (CNBC)

Crude futures are selling off again this morning, extending losses from yesterday's sharp decline that saw the energy sector sink to a six-month low. Rising coronavirus cases around the world are hurting the demand outlook, with further price pressure from last month's increase in OPEC production. Standard Chartered analysts now expect global demand to fall by 9M bbl/day this year before recovering. (SA)

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

The airlines that announced 32,000 job cuts did say that they would reverse the move if the government agrees to additional support in the coming days -- adding more pressure on policy makers to reach an eleventh-hour stimulus deal. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi both said their 90-minute meeting yesterday made progress and House Democrats postponed a vote on the $2.2 trillion package to allow more time for talks. With the House set to leave Washington tomorrow, today's talks are a race against the clock. While the current White House counterproposal is greater than the $1.5 trillion previously touted, Chief of Staff Mark Meadows said any package that "starts with a two" would cause a "real problem."

Due to the ongoing "economic uncertainty from the coronavirus response" and the need for the banking industry to preserve capital, the Fed has extended its ban on share buybacks for the rest of the year. Additionally, dividends will continue to be capped and tied to a formula based on recent income. The decision will apply to banks with more than $100B in assets, and will likely come as a disappoint to lenders like JPMorgan, which had already indicated interest in resuming share repurchases.

It's getting dicey over in Europe:  Calling it "the first step in an infringement procedure," the European Union has launched legal proceedings against the United Kingdom for a breach of "good faith" clauses in the Brexit Withdrawal Agreement.  Should the U.K. refuse to drop its Internal Markets Bill, the EU has threatened further legal action, while some say hefty fines or trade sanctions are even on the table.

U.S. weekly jobless claims total 837,000, vs 850,000 estimate – these are some of the lowest numbers since March.

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