The number of Americans who filed new claims for unemployment benefits last week totaled 1.434 million, roughly in line with expectations, as the coronavirus pandemic continues to ravage the U.S. economy.  It was the 19th straight week in which initial claims totaled at least 1 million and the second consecutive week in which initial claims rose.

Apple reported a historically strong quarter for the company, including $59.7 billion in revenue and double-digit growth in its products and services segments, blowing away analyst estimates.  The company also announced they are going to split their stock 4-1 at the end of August.

Facebook reported second-quarter results that handily topped estimates, growing its user base and advertising business further during the pandemic even as the social media giant came under increased scrutiny for its policies around policing harmful content on its platforms.  Shares of Facebook rose 5% to $246.83.

Amazon posted second quarter revenue and earnings that blew away Wall Street estimates, bolstered by consumer trends during the coronavirus pandemic that have catapulted the tech giant into one of the crisis’ biggest beneficiaries.  The company earned $10.30/share vs. $1.51 expected.
 

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

Stocks were higher Wednesday afternoon, after the Federal Reserve released their July monetary policy, executives of some of the largest tech companies in the US testified before Congress, and a host of quarterly corporate earnings results continued to flow.

The Federal Reserve held interest rates steady in a decision announced yesterday that came along with a tepid outlook on the economy.  In a move widely expected, the central bank kept its benchmark overnight lending rate anchored near zero, where it has been since March.  Along with keeping rates low, the Federal Open Market Committee, which sets monetary policy, expressed its commitment to maintain its bond purchases and the array of lending and liquidity programs.

The busiest week of the earnings season continued, with General Electric and Boeing releasing their latest quarterly figures. GE reported stronger than forecast revenue numbers but a wider-than-expected loss. Shares of the industrial giant fell 4.4%.  Boeing also posted a wider-than-expected loss on their quarter and their stock slid 3%.

Pending home sales continued to climb in June, rising 16.6% monthly since May, and increasing 6.3% since June 2019, according to the National Association of Realtors. It's the second straight month of increases in contract activity.
  
With Northwest Quadrant Wealth Management, I'm Tyler Simones.

Stocks were lower yesterday as tech stocks were under pressure and lawmakers continued their debate over the next coronavirus relief package.

Home-price appreciation maintained a steady pace in May amid the pandemic.  The S&P Case-Shiller 20-city price index posted a 3.7% year-over-year gain in May. On a monthly basis, the index increased 0.4% between April and May.  The national index released as part of the report noted a 4.5% increase in national home prices over the past year.  Phoenix continued to lead the country with a 9% annual price gain in May, followed once again by Seattle with a 6.8% increase.

Consumer confidence fell in July amid a rash of new coronavirus cases in many U.S. states, signaling a rockier economic recovery in the months ahead.  The index of consumer confidence fell to 92.6 this month from a revised 98.3 in June.  The level of confidence is still above its pandemic low of 85.7, but it’s likely to be a long time before it returns to its pre-crisis peak. The index stood near a 20-year high at 132.6 in February before the pandemic struck.

Starbucks swung to a loss during its fiscal third quarter as its same-store sales plunged 40% in the wake of the coronavirus pandemic.  Starbucks lost 46 cents per share, narrower than the losses of 59 cents per share expected by analysts.  Net sales dropped 38% to $4.22 billion, topping expectations of $4.07 billion. Global same-store sales plummeted 40% during the quarter.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

Despite fiscal Q4 results that were largely positive, shares of Microsoft fell slightly in AH trading yesterday. The software giant easily beat analyst estimates, reporting a net profit of $11.2B and revenue that rose 13% to $38B. Traders may have been looking for more. The company's cloud computing operation saw sales growth under 50% for the first time, while transactional license purchasing continued to slow and subsidiary LinkedIn was negatively impacted by the weak job market. (SA)

Senate Republicans have "reached a fundamental agreement" with White House negotiators Steven Mnuchin and Mark Meadows on how to move forward with the next coronavirus relief bill. What's in the proposal? Another round of direct stimulus payments, $16B for coronavirus testing, $105B for K-12 education, colleges and universities, though there was no agreement on a payroll tax cut. The plan, set to be unveiled today, will serve as a starting point for negotiations with Democrats, who have passed a $3.4T bill in the House. Lawmakers are also racing to reach a deal on the $600 weekly supplement to unemployment benefits that's due to expire on July 31. (CNBC)

U.S. weekly jobless claims total 1.416 million, vs 1.3 million expected.  This marks the 18th straight week in which initial claims rose by more than 1 million.

Companies reporting today include Intel, American Airlines, Southwest, and Twitter.  

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

The United States will pay Pfizer and German biotech firm BioNTech $1.95 billion to produce and deliver 100 million doses of their Covid-19 vaccine in the U.S. if it proves safe and effective in humans, the companies announced Wednesday.  Under the agreement, the U.S. can acquire an additional 500 million doses of drug, the Department of Health and Human Services added. BioNTech and U.S.-based Pfizer are jointly developing their potential vaccine.  The vaccine would then be made available to Americans “at no cost,” HHS said. (CNBC)

Tensions between the world's two largest economies escalated further this morning when the U.S. ordered the closure of China's consulate in Houston as reports came in last night of documents being burned in the compound's courtyard. The State Department said that it ordered the closure "to protect American intellectual property and Americans’ private information.” The move is seen as one of the biggest blows to diplomatic ties between the states in decades.  China said it plans to react with "firm countermeasures" with the country's Global Times paper running a poll on Twitter asking people to vote for which U.S. consulate in the country should be closed. (Bloomberg)

Lots of earnings on tap today -- Tesla Inc. which has been riding high in markets in recent months reports results after the bell, with earnings expectations in a huge range while the consensus is for a small loss per share. Should the company turn a profit it would meet a major requirement for inclusion in the S&P 500 Index. Also announcing results today is Microsoft Corp., with analysts expecting the company to have performed well in the stay-at-home economy.   (Refinitiv)

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

Stocks rose yesterday as Amazon shares led other major tech stocks higher. Traders also weighed the prospects of a potential coronavirus vaccine and more U.S. fiscal stimulus.

More airline employees are signing up for buyouts, leaves of absence and early retirements as the threat of furloughs looms this summer.  Close to 17,000 employees or about 28% of Southwest Airlines workforce has signed up for partially paid extended leaves of absence or outright buyouts. Nearly 4,400 put their hands up for buyouts while close to 12,500 expressed interest in extended time off.

Shares of Big Blue, IBM, rose more than 4% after the company reported second-quarter earnings that were better than analysts had expected.  Adjusted earnings per share were down 31% on an annualized basis in the quarter.  It’s IBM’s second consecutive quarter of revenue decline as the coronavirus hit the company’s results.

It’s been just over two months since Oregon began allowing diners to resume eating in restaurants, under limited conditions.  Restaurants enjoyed a sharp uptick in business in the first several weeks they reopened, according to online reservation data.  In recent weeks, though, the pace of recovery has stalled. Data from the online reservation system Open Table indicates the number of people eating out has barely budged in the past month, down nearly two-thirds from this time last year.  The data suggests a ceiling currently in the restaurant industry’s recovery for now.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

While talks on the European stimulus deal are close to wrapping up, in Washington meetings begin today on formulating another fiscal package to counter the economics effects of the pandemic. Senate Majority Leader Mitch McConnell, Treasury Secretary Steven Mnuchin and others will meet in the White House later today with Republicans expected to produce a plan worth about $1 trillion. That number is far below the $3.5 trillion proposed by Democrats. House Speaker Nancy Pelosi said last week that she is confident that the GOP will ultimately agree on a figure that is closer to the Democrat target. (Bloomberg)

In the middle of March, when the world was falling apart, imagine if someone had said to you: "By June, household income will already be higher than it is now, retail sales will have fully rebounded, oh and housing will be booming." Back then, you would have probably said it all sounds like a V-shaped recovery.  That's exactly what we got: total retail sales have basically erased all their losses, And total household compensation when you include unemployment insurance, is above pre-crisis levels.  Strange times indeed.. 

It's a fairly blank state on the economic data front today, however, we're in the thick of earnings seasons:  reports on tap today include Halliburton, IBM, and Phillips.  

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

Stocks were lower yesterday for the first time in 5 days as shares of the major tech companies struggled once again and traders digested a mixed batch of corporate earnings and economic data. 

Retail sales in June jumped 7.5%, and May’s increase was revised up to 18.2%. June sales totaled $524.3 billion and were about 1.1% above the level of last June.

The number of Americans who filed for unemployment benefits rose more than expected last week.  Initial weekly jobless claims came in at 1.3 million for the week ending July 11.  It was also the 17th straight week in which initial claims totaled at least 1 million.  Continuing claims — which refer to those receiving benefits for at least two straight weeks — totaled 17.33 million for the week of July 4. 

Home-builder confidence in the U.S. improved in July for the third straight month and recovered to pre-pandemic levels, according the National Association of Homebuilders.  July marks the third consecutive improvement of the index after two months in negative territory. The indicator, which registered the biggest on-month drop ever in April, took three months to rebound to March's pre-pandemic level.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

Stocks rose for a 4th straight day yesterday on the back of positive coronavirus vaccine news and a blowout quarter from Goldman Sachs. 

Data published by the New England Journal of Medicine showed Moderna’s coronavirus vaccine produced a robust immune response, or neutralizing antibodies, in all 45 patients in its early stage human trial. The news sent Moderna shares sharply higher.

U.S. industrial production in June posted the largest monthly gain since 1959, indicating manufacturing is stirring to life after coronavirus-related shutdowns.  Total output at factories, mines and utilities increased 5.4% from the prior month after climbing 1.4% in May.  The outsize rebound in production still leaves the Fed’s index of industrial output 10.9% below pre-pandemic levels and the capacity utilization rate shows plenty of slack as demand builds only gradually. What’s more, sales may be tempered in coming months as reopening’s have entered a more uncertain phase.

Earnings season continued and Goldman Sachs reported quarterly numbers that easily beat analyst expectations.  The company’s good results were driven by a 93% surge in trading revenue which was similar to what we saw in the other major banks earnings reports.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.
 

Stocks reversed yesterday, closing lower as a rally in major tech names — which briefly pushed the S&P 500 into positive territory for the year — fizzled out.

Sales of newly built homes jumped 55% annually in June, according to a monthly survey by John Burns Real Estate Consulting, which has historically mirrored the U.S. Census report. It was the largest annual gain since homebuilding began again following the epic housing crash a decade ago. It is also the highest pace since the height of the unprecedented housing boom in 2005.

Beverage giant Pepsi released a second-quarter earnings report that showed a 3% decrease in sales. Earnings per share slid 18%, but the company still turned a profit.  Pepsi generated $16 billion in revenue for the quarter ended June 13. Earnings per share were $1.18, down from $1.44 last year.  Their snack food brands Frito-Lay and Quaker Foods both saw big sales increases as people stayed at home in the quarter.  Shares of Pepsi are higher on the news.

The federal government incurred the biggest monthly budget deficit in history in June as spending on programs to combat the coronavirus recession exploded while millions of job losses cut into tax revenues.  The Treasury Department reported that the deficit hit $864 billion last month, an amount of red ink that surpasses most annual deficits in the nation’s history.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones.

Stocks traded higher last week as news about a potential coronavirus treatment increased hope for an economic recovery following the outbreak.

Gilead Sciences said their coronavirus treatment candidate, remdesivir, “was associated with an improvement in clinical recovery and a 62 percent reduction in the risk of mortality compared with standard of care.” The news sent Gilead shares up more than 2%.

Earnings season is set to kick off this week with big banks and others reporting their quarterly results. JPMorgan, Citigroup, Wells Fargo and Pepsi will report.  Corporate profits are expected to fall by 44% in the second quarter, which would be the biggest drop in quarterly earnings since the fourth quarter of 2008. However, the market could shrug off the sharp profit decline as long as companies signal a recovery on the horizon.

The wholesale cost of U.S. goods and services fell in June, reflecting depressed demand in retail and other major parts of the economy caused by the pandemic.   The producer price index declined 0.2% last month.  Wholesale inflation has fallen 0.8% in the past year, unchanged from May. By contrast, wholesale inflation was rising at a 1.6% pace just a year ago.

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

The long-running dispute between the U.S. and France over taxes on technology giants takes another move forward today with Washington set to announce details of tariffs on $500 million to $700 million of goods. The duties aren't expected to come into effect, though, until French authorities start collecting taxes on companies including Amazon.com Inc., Alphabet Inc.’s Google and Facebook Inc. It's not only tech companies caught in the crosshairs of geopolitics, global banks operating in Hong Kong face huge regulatory headaches as they try to follow China's new security law while staying on the right side of possible U.S. sanctions. (Bloomberg)

Tyson Foods the biggest U.S. meat company by sales, currently relies on about 122K workers to churn out about 20% of chicken, beef and pork produced in the U.S. That's changing after the coronavirus pandemic showed supply chain vulnerabilities. The company is now pushing further into robotics, developing an automated deboning system destined to handle some of the roughly 39M chickens it processes each week. At Pilgrim's Pride the second largest U.S. chicken processor, deboning machines now trail humans by only 1% to 1.5% in terms of meat yield per chicken. (SA)

S&P 500 is down 21, and the NASDAQ is down 59. The MSCI International Index is up down 4/10’s%. 

The International Energy Agency said that demand for crude should rebound sharply over the next three months as economic activity resumes, while bloated stockpiles will diminish as OPEC and its allies persevere with production cuts. The forecast warned however that the outlook could be derailed by the upsurge in the virus. It seems oil traders are paying more attention to the warning than to the optimistic outlook,

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

Add Brooks Brothers to the recent retail bankruptcy list that includes Neiman Marcus, J.Crew and J.C. Penney.  The storied apparel brand, founded in 1818, will be looking for a buyer as it goes through reorganization, and has decided to close 51 stores, a decision it attributed to the coronavirus pandemic. One reason for Brooks Brothers' struggle was its big rent obligations, but the company was also feeling some effects of a change in traditional business dress and shift towards casual, despite its own efforts in activewear. That loss in demand will only become more pronounced as people continue to work from home. (SA)

Walt Disney World opens to annual passholders today and tomorrow, with the Magic and Animal Kingdom areas opening to the general public on Saturday, followed by Epcot and Disney’s Hollywood Studios four days later. New safety requirements from the theme park operator will include temperature checks, face coverings and extra sanitation efforts. (CNBC)

There's a line of thought out there that although the virus is surging and stalling the recovery, that the market is somehow unconcerned. This isn't true. The market's paying attention and reacting, and all you have to do is look beneath the headline level. The basic gist is that a bunch of recovery, reflation, and "back to normal" type trades all peaked almost exactly a month ago on June 8. Since then they've been going down, as it became clearer that things weren't going well nationally. Shares of Capital One (credit card company exposed to household finances), Exxon, JPM, and the airlines, have all been sliding steadily the past month. (Bloomberg)

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

Shares of Walmart soared 7% yesterday on reports that the retailer's same-day delivery program, dubbed an "Amazon Prime Killer" by some, is due to launch in July. The service, named Walmart+, is priced at $98 per year and undercuts Amazon Prime at $119, according to Recode. It will also include video entertainment, as well as other perks like discounts on gas, product deals, reserved delivery and two-hour delivery offers. (SA)

Allstate has agreed to acquire National General Holdings for nearly $4B in cash as the U.S. insurance giant looks to "increase market share in personal property-liability." Shareholders of National General will receive a total of $34.50 a share -- representing a 70% premium to the stock's closing price on Tuesday. The deal, which includes a breakup fee of $132.5M, will be "accretive to adjusted net income earnings per share and return on equity beginning in the first year," said Allstate CEO Tom Wilson. (CNBC)

Unemployment rates in the world’s advanced economies will end the year higher than at any time since the Great Depression and not return to their pre-pandemic levels until 2022 at the earliest, according to the Organization for Economic and Cooperation and Development.  If the U.S. is hit by a second wave of lockdowns, the OECD forecasts jobless rates of 12.9% in 2020 and 11.5% in 2021, compared with 11.3% this year and 8.5% next year if there is no sustained resurgence. (FT)

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

One of Silicon Valley's oldest private startups has filed confidentially to go public, and may follow Spotify and Slack in opting for direct listing. Co-founded in 2003 by famed investor Peter Thiel, Palantir Technologies conducts sensitive and extensive data-mining work for large companies and government agencies. Reports suggest that Palantir has yet to turn an annual profit, though it has been valued privately at as much as $20B and is in the midst of raising nearly $1B in new capital, separate from an IPO. (SA)

Deal-making is back… Sunrun, the largest U.S. residential solar company, is acquiring a leading competitor, Vivint Solar, to form one of the world's largest providers of solar equipment with about 500K customers. The all-stock deal, unanimously approved by the companies' boards, is valued at $3.2B including debt, and is expected to deliver annual cost savings of about $90M. Vivint shareholders will get 0.55 shares of Sunrun for every share held, representing a premium of 10.4% to Vivint's close yesterday. (FT)

Shares of Tesla jumped for a fourth straight session on Monday, soaring another 13.5% to $1,371, and underscoring some concern on Wall Street about the “lofty” valuation of the automaker.  The California-based carmaker is now valued at more than $260 billion, well ahead of Toyota's $206 billion and more than four times the combined market value of Ford and General Motors. (FT)

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

Sitting on the sidelines during the coronavirus crisis, Warren Buffett's Berkshire Hathaway broke its silence at the end of a holiday weekend with its largest acquisition in more than four years. The conglomerate is buying Dominion Energy's Gas Transmission & Storage segment for $9.7B in cash, which includes more than 7,700 miles of natural gas storage and transmission pipelines and about 900B cubic feet of gas storage. Proceeds will be about $3B, as the deal includes the assumption of $5.7B in debt, and there are some taxes to pay (that amount will be used by Dominion to buy back shares). (SA)

Uber has agreed to acquire Postmates in a $2.65 billion all-stock takeover.  The takeover would help Uber gain ground against privately-held DoorDash Inc., the current market leader in U.S. food delivery. While Postmates hasn’t kept pace with DoorDash, it maintains a strong position in Los Angeles and the American Southwest, both of which could be valuable to Uber Eats.  The move for Postmates comes on the heels of Uber’s failed bid to acquire publicly traded GrubHub Inc., which was scooped up by Europe’s Just Eat Takeaway.com for $7.3 billion. (Bloomberg)

International markets are rising sharply today, as bullish sentiment in China rippled across global markets to drive investors’ optimism for a recovery from the pandemic.  China’s index of Shanghai- and Shenzhen-listed shares jumped as much as 5.7 per cent, closing at a 5-year high.  The upbeat mood in equity markets came despite new increases in coronavirus cases in a number of countries. (FT)

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

Stocks traded mostly higher yesterday to kick off the second half of 2020 with the NASDAQ hitting yet another all-time-high.

The US Economy added 4.8 million jobs in June and the unemployment fell to 11.1% from 13.3% in May, suggesting that the employment picture is improving after a stunning collapse due to the pandemic. Economists polled by MarketWatch had predicted 3.7 million jobs were created or restored in June.

Shares of FedEx jumped more than 14% after the company’s fourth quarter results blew past analyst estimates on the top and bottom lines as consumers flocked to online shopping amid the pandemic. Wednesday’s gain in the stock represent’s the best day since September of 1986.

American manufacturers fired up their production lines in June and expanded for the first time since the start of the coronavirus pandemic almost four months ago, but growth hasn’t returned to precrisis levels and is unlikely to do so soon.  The Institute for Supply Management said its manufacturing index climbed to 52.6% from 43.1% in May and an 11-year low of 41.5% in April.

With Northwest Quadrant Wealth Management, I’m Tyler Simones
 

U.S. stock-indexes were higher yesterday, as data showing recovering consumer confidence and higher home prices helped offset ongoing concerns about the rising number of new coronavirus cases in many American states.  Both the Dow and S&P 500 had their best quarterly performance since 1987.

Cirque du Soleil, the producer of a number of Las Vegas acrobatic shows, has filed for bankruptcy.  The Montreal-based company blamed its bankruptcy on the "immense disruption and forced show closures as a result of the Covid-19 pandemic" and is aiming to restructure its debt with assistance from the Canadian government and private equity firms.

Consumer confidence rose in June to a three-month high as a reopening economy buoyed the spirits of Americans, but a recent spike in coronavirus cases could dampen any optimism unless it’s brought under control soon.  The index of consumer confidence rose to 98.1 this month from a revised 85.9 in May.

Home prices strengthened in April, despite a national economic shutdown and a sharp drop in home sales due to the coronavirus.  Prices for existing homes rose 4.7% compared with April 2019, according to the Case-Shiller National Home Price Index. Price gains have been accelerating since autumn.  The 20-City Composite increased 4% year over year.  Cities with the strongest annual price gains were Phoenix, Seattle and Minneapolis.

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