President Donald Trump threw Congress a curveball when he expressed unhappinesswith the stimulus package that passed through both legislative chambers on Monday. He demanded payments to individuals be increased to $2,000 from $600, something House Speaker Nancy Pelosi welcomed, adding that Democrats were ready to bring it to the House. Trump didn't say he would veto the bill as it currently stands, and he has until Dec. 28 to sign it.

The SEC will allow companies to raise new capital through direct listings, whereby a company floats its shares on a stock exchange, but without hiring banks to underwrite the transaction like in an IPO. Until now, companies have only been allowed to use direct listings to sell existing shares, limiting the process to a small number of cash-rich companies like Palantir which went public in September.

Brexit trade talks are said to be hanging in the balance once again as officials try to wrap up negotiations today, with the U.K. only a week away from leaving the single market. Discussions are still hung up over fishing rights, though the other two issues, a competitive playing field and enforcement of a deal, seem to have been resolved. Meanwhile, France is reopening its borders with the U.K. for truck drivers who test negative for COVID-19 following a two-day shutdown caused by the new coronavirus variant in England. Some U.K. officials are even speculating that France closed its borders to give a taste of what would happen if there was a no-deal Brexit.

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

The House and Senate passed the 5,593-page combined year-end spending bill and stimulus package yesterday that amounts to $2.3 trillion in total. Of course, you can rest assured almost none of our elected officials even read much of the bill. President Donald Trump is expected to sign it into law today. The legislation provides for federal funding for the rest of the fiscal year, supplemental unemployment benefits and $600 stimulus checks for most Americans and their children. Democrat leaders in Congress vowed to make another deficit-spending relief package the top priority in the next term, a policy that would be make easier if they win the two Senate seats up for grabs in the Georgia runoff election.

Apple's Project Titan is not only alive, but plans to produce an electric passenger vehicle with "breakthrough battery technology" and self-driving capabilities by 2024, according to a fresh report from Reuters. The news sent AAPL shares nearly 3% higher in premarket trade after closing up yesterday on the news. Project Titan has been moving in fits and starts since 2014. It first began to design its own vehicle from scratch, but reverted back to a software push at one point and reassessed its goals. It remains unclear who would assemble a possible iCar, but sources have said they expect Apple to rely on a manufacturing partner.

Regulators appear to be getting serious about crypto as the space turns into one of the investing themes of 2020. A day after the Treasury proposed new rules on crypto movement, the SEC is expected to bring a lawsuit against Ripple Inc. by alleging it violated investor protection laws by selling unregistered securities when it sold XRP to investors. Brief rhetorical question for those crypto “investors” out there: why would you ever buy something with a currency you expect to be worth more in the future?

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

Lawmakers from both parties announced Sunday night that they finally reached an agreement on a $900B coronavirus spending package to bolster the U.S. economy. It would be one of the largest economic relief bills in the nation's history, second only to the $2.2T CARES Act passed back in March. The legislation includes $600 in direct payments to individuals and $300 per week of enhanced unemployment benefits, as well as funding for small businesses, vaccine distribution, food assistance, education and child care. It also covers rental relief and extends the nationwide eviction moratorium through January 31, 2021. The House is expected to vote on the bill today, followed by the Senate.

Lockheed Martin is buying rocket engine manufacturer Aerojet Rocketdyne for $4.4B as the company beefs up its propulsion capabilities amid competition from new entrants like SpaceX and Blue Origin. Speaking of space, Viasat inked an agreement to acquire RigNet in an all-stock transaction that will see the company diversify across a number of important verticals. Meanwhile, private-equity firm Thoma Bravo struck a deal to buy property-management-software provider RealPage for $9.6B, in one of the largest recent leveraged buyouts.

The relief package leaves out two of the most contentious elements in the negotiations: legal protections for businesses from coronavirus lawsuits, which had been sought by the GOP, and direct aid for state and local governments advocated by Democrats. A dispute was additionally resolved over the Fed's emergency lending powers. The central bank wouldn't be able to replicate programs identical to the ones it started at the beginning of the pandemic without Congressional approval, but that wouldn't prevent it from starting other similar programs. The airline industry also received a big lift, winning $15B to reinstate payroll reimbursements that expired two months ago.

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

The S&P 500 and Nasdaq Composite rose to record highs yesterday, boosted by hope of Washington coming through on additional fiscal aid before the end of 2020.

New applications for U.S. unemployment benefits rose in mid-December to a nearly four-month high, pointing to rising layoffs and more damage to the economy from a record increase in coronavirus cases.  Initial jobless claims climbed to 885,000 in the seven days ended Dec. 12 from 862,000 in the prior week. It was the second monthly increase in a row.

U.S. home builders started construction on homes at a seasonally-adjusted annual rate of 1.55 million in November, representing a 1.2% increase from the previous month’s figure. Compared with last year, housing starts were up nearly 13%. The pace of building permits was the highest in 14 years.

Dozens of states filed an anti-trust lawsuit against Google, alleging that the search giant has an illegal monopoly over the online search market that hurts consumers and advertisers.  The lawsuit, announced by Colorado Attorney General Phil Weiser, was filed in federal court in Washington, D.C. by states represented by bipartisan attorneys general. The lawsuit was joined by the attorneys general of 35 states including Oregon.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.
 
 

Stocks at record highs and bond yields not far from their historic lows are telling two different stories, but Federal Reserve Chairman Jerome Powell said he isn’t worried about the disparity.  In fact, the central bank chief said during a news conference yesterday, the low rates are helping justify the surge in stocks that has gone on largely unabated since the March pandemic lows.  The Fed also affirmed they are unlikely to raise interest rates through at least 2023.  They also said they see the US economy growing by 4.2% in 2021.

U.S. retail sales fell more than expected in November, likely weighed down by raging new Covid infections and decreasing household income, adding to growing signs of a slowdown in the economy’s recovery from the pandemic recession.  The second straight monthly decline in retail sales could nudge Congress to agree on another fiscal stimulus package.

The first home test for COVID-19 that doesn’t require a prescription will soon be on U.S. store shelves.  U.S. regulators authorized the rapid coronavirus test, which can be done entirely at home. The announcement by the FDA represents another important step in efforts to expand testing options.  This will allow sales in places like drugstores “where a patient can buy it, swab their nose, run the test and find out their results in as little as 20 minutes.  Australian manufacturer Ellume said it expects to produce 3 million tests next.  A company spokesperson said the test will be priced around $30 and be available at pharmacies and for purchase online.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

US Stocks had their first down week in 3 week last week as investors are less optimistic about Congress passing another stimulus package before much of the Cares Act expires.

U.S. consumers grew more confident in the economy in late November and early December, with many expecting the economic conditions to improve when the country begins to exit from the coronavirus pandemic.  The University of Michigan said their index of consumer sentiment climbed to 81.4 in the two weeks ended Dec. 9, from 76.9 in November.

Oregon factories eliminated more than 16,000 jobs in the early weeks of the pandemic and there’s little sign those jobs are coming back.  Manufacturing is one of Oregon’s largest economic sectors, employing nearly 200,000 statewide at the start of the year. Employment fell by more than 8% when the pandemic hit last spring and has shown little sign of a rebound.  The hardest hit sectors have been primary metal manufacturing and transportation equipment production, down 24% and 19% respectively.  Oregon allowed factories to continue operating throughout the spring stay-home order and so the manufacturing downturn wasn’t as severe as it was in the hospitality and fitness sectors, for example. But those industries were in steady recovery for most of the year – that hasn’t happened at Oregon’s factories.  Precision Castparts, which supplies large metal components to the aviation industry, is in the process of laying off 40 percent of their workers.

Tyler Simones
Partner
Northwest Quadrant Wealth Management

Just when it was starting to look like a deal could be done in Washington, talks between Democrats and Republicans have gotten hung up again on the issues of business liability and state aid. The progress of the past few days where talks between both sides had coalesced around a $900 billion figure sparked optimism that a deal could be agreed in the next week. Now Senate Majority Leader Mitch McConnell wants lawmakers to proceed with a smaller bill that doesn't include state government aid and business liability protection. Further adding to fiscal woes, the Senate yesterday postponed a vote on a one-week stop-gap bill that would keep the government funded beyond today.  

Airbnb hosts from around the world rang their doorbells on Thursday to celebrate the company's stock market debut, with shares of the home rental business more than doubling on their first day of trade. The stock opened at $146 apiece, which is more than double its elevated $68 IPO price.  The current share price gives Air Bnb a market cap of $100bn on a fully diluted basis.

"There is now a strong possibility that we will have a solution that is more like an Australian relationship with the EU," Boris Johnson said in his first remarks since a crunch meeting in Brussels, suggesting a no-deal Brexit may be in the cards. What does that look like? Canberra largely does business with the EU based on World Trade Organization rules, and has few other arrangements in place, such as cooperation on science and trade in wine. With negotiations between the U.K. and EU still hung up over fishing rights, a competitive playing field and enforcement, some "Plan B" details are surfacing in case an agreement doesn't materialize before a weekend deadline.

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

DoorDash had a stellar debut on the public markets yesterday, with shares closing at $189, nearly 86% higher than its IPO price and giving the food delivery service a market value of near $60B. The performance is an indication that investors haven't lost their appetite for fast-growing tech stocks, and is a good sign for Airbnb,  which debuts today on the Nasdaq. The home rental business priced its IPO at $68 per share, above its marketed range of $56-$60, valuing the company at $47B on a fully diluted basis. It comes after Airbnb turned a surprise $219M profit last quarter as people resumed traveling - but to different destinations (rentals surged in rural areas as cities faced lockdowns and extensive coronavirus restrictions).  

Facebook got nailed with two lawsuits yesterday, one from the Federal Trade Commission and another from a group of 46 U.S. states, which both accused the company of abusing its monopoly power in social networking. The FTC suit focused on Facebook's acquisition of Instagram in 2012 and WhatsApp two years later, describing the deals as a way to stifle competition, while state attorneys general said its actions were a "buy or bury" approach toward its rivals. Is a divestment in the cards? Facebook denied the anti-competive practices, calling it "revisionist history" of two major acquisitions the government had approved several years ago.

This time they're serious about a deadline, or so they say... Meeting after meeting, extension after extension, the U.K. has announced that Sunday will be a "point of finality" for Brexit trade talks if the EU does not "move substantially" in negotiations. It follows a three-hour dinner in Brussels, where British Prime Minister Boris Johnson met with European Commission President Ursula von der Leyen in the hope of breaking months of deadlock.

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

Treasury Secretary Steven Mnuchin's proposal for a $916 billion pandemic relief package is seen by some as boosting the chances of reaching a deal. It is the first move by the Trump administrationsince Election Day, and comes a week after Democrat leaders in Congress dropped their demands for a multi-trillion dollar package. House Speaker Nancy Pelosi and Senate Democratic leader Chuck Schumer called it progress but seemed to prefer to concentrate on the bipartisan negotiations already underway. There is a possibility of movement on the latter, with Senate Majority Leader Mitch McConnell suggesting for the first time he would be willing to set aside his demands for business liability protection.  

Shares of DoorDash will begin trading on the NYSE this morning under ticker symbol "DASH" after pricing its IPO at $102 apiece, way above its upwardly revised target range. That would raise $3.37B at a valuation of around $38B (more than double its $16B valuation in June) after benefiting from a surge in demand for food delivery services due to COVID-19 restrictions. A day after DoorDash's debut, Airbnb (ABNB) is set to begin trading, followed by videogame company Roblox (RBLX) and the parent of online retailer Wish, ContextLogic (WISH)

U.K. Prime Minister Boris Johnson heads to Brussels this evening for a dinner with European Commission President Ursula von der Leyen that's being cast as a last chance to unlock stalled Brexit negotiations. If all goes well, the two sides could be back in a room hammering out trade details within days, but if it goes badly, a tumultuous no-deal Brexit may be on the menu in three weeks' time. 

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

US Stocks closed at record high’s last Friday as traders were encouraged that the US economy would get another round of fiscal stimulus from lawmakers.

In the week ahead investors will be watching for news from a meeting the FDA is having where they may give emergency approval in the US for Pfizer’s COVID vaccine.  We also have two high profile IPO’s from Airbnb and Doordash this week.

The large services sector of the U.S. economy mostly brushed off a record surge in coronavirus cases in November, but business leaders expressed greater worries about what lies ahead.  A survey of senior executives at non-manufacturing companies dipped to a six-month low of 55.9% from 56.6% in October, according to the Institute for Supply Management.  Readings above 50% signal that businesses are expanding, but the index has slowed two months in a row and fewer industries are reporting growth.

Mortgage rates fell again to the lowest level on record. But the boost home buyers are seeing from low interest rates has faded.  The 30-year fixed-rate mortgage averaged 2.71% for the week ending Dec. 3, down a basis point from the week prior. This represents the 14th record low that Freddie Mac has reported in 2020.
 
Tyler Simones
 

US Stocks rose slightly yesterday, eking out another record closing high, as traders digested the latest developments surrounding a new round of U.S. fiscal stimulus negotiations.

 
The U.K. became the first Western nation to grant emergency-use authorization for a Covid-19 vaccine, clearing a shot developed by Pfizer and BioNTech to be distributed within days.  The two-shot vaccine is also being reviewed by the FDA here in the U.S., where a similar authorization could come later this month and a rollout before the end of the year.
 
American Airlines is flying its employees, including top executives, and reporters on their Boeing 737 Max planes this week in hopes of boosting confidence in the jetliners that were grounded for 20 months after two crashes that killed 346 people.  The FAA lifted their ban on the planes on Nov. 18, clearing airlines to start flying the jets again.
 
The Oregon Employment Department estimates that 70,000 Oregonians could lose their unemployment benefits on Dec. 26 when Pandemic Unemployment Assistance (PUA) and a separate program that offers extended benefits to those that have exhausted their regular unemployment expire.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

US Stocks were higher yesterday with the S&P 500 hitting a new record, as the market’s historic rally extended into December.

Economic activity in the manufacturing sector grew in November with the overall economy notching a seventh consecutive month of growth, but the manufacturing sector growth was slower than expected based on employment contracting.

Shares of the software company Salesforce dropped more than 3% after they announced they will acquire messaging platform Slack for $27.7 billion.  Slack’s shares were higher on the news.  Both companies also reported quarterly earnings that were better than expected. 

Cyber Monday was projected to be the largest online shopping day in U.S. history and it delivered just that— a 15.1% increase over last year coming in at $10.8 billion for the day.  Adobe analyzes shopping data that showed one trillion visits to U.S. retail websites and they calculated that the total season-to date holiday spending, including Cyber Monday, is over the $100 billion threshold. This milestone is usually not reached until mid-December
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

US Stocks were lower yesterday but had their best November in 35 years with the S&P 500 rising over 11% and the Small Cap Index having its best month ever.

According to the National Association of Realtors pending sales in the U.S. housing market declined slightly for a second consecutive month in October, signaling buyers may be reaching a limit on what they can afford.  The Pending Home Sales Index, which analyzes home sales based on contract signings, fell 1.1% in October after dipping 2.2% in September.
The Video Communication company Zoom saw their stock fall after the company reported fiscal third-quarter earnings and quarterly guidance that exceeded analysts’ expectations. Investors seemed disappointed that the rate of revenue growth, which has accelerated this year, could moderate.  Zoom saw their revenue grow by 367% in the quarter but investors seemed to be expecting more.

A recent IRS ruling could force many small businesses to pay taxes on government aid meant to help through the pandemic.  On Nov. 18 the IRS said the businesses cannot deduct expenses such as payroll and rent, paid for with money from the Paycheck Protection Program of the CARES Act. 

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