Stocks traded in record territory again last week with the S&P 500 and NASDAQ set to finish the month of November up 12%, with the small Cap Russell 2000 index gaining 21% in the month.

Spending online on Black Friday this year surged 22% to hit a new record, as the pandemic pushed more people to shop from the sofa and avoid crowded stores and malls. Traffic at stores on Black Friday fell by 52% compared with last year.  Consumers spent $9 billion on the web the day after Thanksgiving, up 22% year over year. This makes Black Friday 2020 the second-largest online spending day in history in the United States, behind Cyber Monday last year. Today’s Cyber Monday is slated to become the largest digital sales day ever, with spending reaching between $11 billion and $13 billion, which would represent growth of 15% to 35% from a year earlier.

The cost of buying a house rose sharply again last month and by one measure hit a six-year high, a Case-Shiller index showed, signaling that prospective buyers are unlikely to find better deals any time soon.  A measure of home prices in 20 large cities rose at a 6.6% yearly pace in October, according to the S&P CoreLogic Case-Shiller price index. That’s up from 5.3% in the prior month.  A broader measure by Case-Shiller that covers the entire country showed a similarly large 7% increase in home prices over the past year, marking the fastest 12-month gain since 2014.  Rock-bottom mortgage rates and a flush of people leaving cities during the pandemic for more space in the suburbs has boosted demand at a time when the supply of home for sales is near a historic low. The biggest increases took place in Phoenix, Seattle and San Diego. The smallest were in New York and Dallas.

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

A disagreement has emerged between Treasury Secretary Steven Mnuchin and Federal Reserve Chair Jerome Powell over whether to preserve emergency lending programs designed to shore up the economy. Mnuchin wrote to the Fed demanding the return of money the government provides the central bank for lending to certain markets. The Fed issued a statement saying the "full suite" of measures needs to be maintained. While Mnuchin said he is merely carrying out the law prescribed by the Cares Act, markets are nervously eyeing signs of disagreement between the top two U.S. economic policymakers.  

Top little, too late? General Motors plans to launch 30 all-electric models worldwide by 2025 at “all price points”, Mary Barra, chief executive, said on Thursday. The company will also increase investment in electric vehicles from $20bn to $27bn over the next five years and accelerate the rollout of existing EV brands, including the GMC Hummer and Cadillac Lyriq.  This comes as Tesla’s market cap fast-approaches $500bn as it prepares to enter the s&p500 index next month.

Rising prospects of a Covid-19 vaccine are threatening to kill off the bull market for gold, after an epic two-year rally that pushed the precious metal to a record high in the summer. Gold prices have already fallen about 10 per cent since their August peak above $2,000 a troy ounce, as confidence gradually returned to asset markets. This could be the start of a sustained slide for the metal, after two successful trials for Covid-19 vaccines emerged in November. Some bulls have not given up, pointing to a possible rise in inflation that typically boosts the precious metal. But a recovering global economy dents the appeal of gold, commonly used as a haven in times of turmoil.

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

Shares of the big box retailer Target are higher after reporting blowout third-quarter earnings. Target reported adjusted earnings of $2.79 per share on revenue of $22.63 billion. Wall Street expected earnings of $1.60 per share. Target’s curbside pickup service grew more than 500% and its home delivery service Shipt was up nearly 280%.

U.S. homebuilding increased more than expected in October, suggesting the housing market continues to be sustained by historically low mortgage rates even as the economic recovery shows signs of strain amid a resurgence in new Covid-19 infections.  Housing starts rose 4.9% to a seasonally adjusted annual rate of 1.530 million units last month.

The FAA has cleared Boeing’s 737 Max to fly passengers again after a nearly two-year ban, a turning point in a protracted crisis for the aircraft giant stemming from two crashes of its top-selling plane that killed 346 people.

More than 3,700 Les Schwab Tire Centers employees in Oregon are due to receive $2,500 checks this month as part of a settlement over a 2017 class-action lawsuit that alleged the chain hadn’t given workers enough time for lunch.  The suit alleged the Schwab employees hadn’t received the full, 30-minute lunch breaks. The Bend-based company continues to maintain that it provides the requisite lunch breaks but agreed to pay $16 million to settle the case anyway.

With Northwest Quadrant Wealth Management, I’m Tyler Simones
 
 

US Stocks were lower yesterday on the back of some disappointing economic data.

According to the Commerce Department shoppers kept buying electronics and home improvement supplies, but October proved a month when much of the retail world held its breath. Retail sales barely budged, inching up just 0.3% from September.  Rebounding from near-collapse in the spring, retail spending has improved since the summer, even topping pre-pandemic levels. In October, overall retail sales were up 5.7% compared with a year earlier.

 Shares of Tesla are sharply higher after the S&P Dow Jones Indices announced that they will add Tesla to the S&P 500 Index on December 21st.  When Tesla is added to the index it will be by far the largest company to be added at the time of inclusion at almost $400 Billion.  This also makes Elon Musk the companies founder the 3rd richest person on the planet.

Airbnb has filed paperwork for an initial public offering later this year hoping to raise $3 Billion, giving the company a $30 Billion valuation.  The company also reported $219 million in net income down 20% from the same period a year ago.

With Northwest Quadrant Wealth Management, I’m Tyler Simones

U.S. stocks closed at record highs yesterday after preliminary coronavirus vaccine data from the drug company Moderna further lifted expectations of a strong economic recovery.  Stocks that would benefit from the economy reopening like airlines, cruise lines, banks, and hotels led the way higher.

Shares of Costco are higher after the company announced that they will pay a special cash dividend of $10/share to shareholders on December 11th.  The aggregate dividend will be $4.4 billion and will be funded through their existing cash hoard.

In an open letter to Gov. Kate Brown and other state leadership signed by more than 300 restaurant and bar industry members, the Independent Restaurant Alliance of Oregon is asking for various relief measures including financial assistance, COVID-19 testing and clearance to sell cocktails to-go.  In the letter, the restaurant alliance asks the state for support, noting that before the start of the pandemic, the restaurant industry employed an estimated 9% of the state’s workforce and that an estimated 75% of Oregon’s more than 10,000 restaurants and bars are in danger of closing permanently.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones

Initial jobless claims are expected to show a small improvement from last week's 751,000 total when the data is released at 8:30 a.m. Eastern Time. Policymakers are becoming increasingly concerned that the resurgence of the pandemic in the U.S. is putting the recovery in jeopardy. Later today Fed Chair Jerome Powell speaks at the European Central Bank's annual forum, which investors will monitor closely for any hints of a change in his assessment of risks.  

Shares of Moderna (NASDAQ:MRNA) are 5% higher in premarket trade after accumulating enough cases of COVID-19 in its vaccine trial to analyze the shot's effectiveness. Preliminary results could be released soon, with the biotech firm saying it could hand the data over to an independent monitoring committee within days. The vaccine, which uses a similar mRNA technology to Pfizer's, is peceived to be highly effective

A day after OPEC cut its global oil demand forecasts, the IEA is jumping on the train, as the "task of re-balancing the market will make slow progress unless the fundamentals change." "With a COVID-19 vaccine unlikely to ride to the rescue of the global oil market for some time, the combination of weaker demand and rising oil supply provides a difficult backdrop to the meeting of OPEC+ countries," according to the agency. The IEA now expects world oil demand to contract by 8.8M barrels per day this year.

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

Yesterday's monster stock rally started to run out of steam before the close, and we're seeing something of a mixed bag this morning as investors adjust their portfolios away from pandemic plays. Overnight, international stocks traded higher.   

European regulators have announced formal antitrust charges against Amazon over how it uses data about the merchants on its platform. At the heart of the case is the company's dual position as a retailer that sells goods but also acts as a marketplace for third-party vendors. Amazon has downplayed antitrust concerns in the past, noting that many retailers have their own private label offerings, and that online sales represent only a small slice of the overall retail sector. Over in the U.S., Amazon is part of a group of companies under scrutiny by the House Judiciary Committee, while the DOJ and FTC have also launched antitrust probes against the company.

 Shares of Beyond Meat were getting crushed by about 23% in Tuesday’s premarket, the morning after the company issued disappointing third-quarter results that capped a volatile dayfor the stock on Wall Street. It all started Monday when McDonald’s announced new plant-based offerings. Confusion ensued about whether Beyond Meat, which made a meatless patty for a McDonald’s test in Ontario, would be a supplier for the McPlant. The fast-food giant declined to provide CNBC with any supplier details. But Beyond Meat said it worked with McDonald’s on the new line. 

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

 The S&P 500 and Nasdaq jumped 7.5% and 9%, last week, while the Dow rose 7%. The S&P 500 posted its biggest election week gain since 1932.  This morning US Stocks are sharply higher led by the pharmaceutical giant Pfizer who says that their COVID vaccine is 90 percent effective.

This week investors will be eyeing earnings season which is beginning to wind down, but there are still dozens of companies reporting, including McDonald’s, Disney, Applied Materials and Cisco. As of Friday, about 89% of S&P 500 companies had already reported third-quarter earnings results. Of these, 86% of them reported a positive earnings per share surprise. If this proportion carries through the remainder of earnings season, it will mark the highest percentage of upside earnings surprises for S&P 500 companies since FactSet began tracking the measure in 2008.

Warren Buffett’s Berkshire Hathaway said their operating earnings came in at $5.478 billion, down more than 30% from the year-earlier period.  As the coronavirus pandemic weighs on their operating earnings and stock price, Berkshire Hathaway ramped up their stock repurchasing program even more in the third quarter, nearly doubling the record buyback from the second quarter.  Warren Buffett’s conglomerate bought back $9 billion of its own stock.
 

The US Economy added 638,000 jobs and the unemployment rate dropped to 6.9 percent in October both were better than expected.

The Federal Reserve held short-term borrowing rates near zero in a decision that characterized the economy as growing but not near where it was before the coronavirus pandemic hit.  As markets widely expected, the Fed kept its benchmark interest rate anchored in a range between 0%-0.25%, where it has been since an emergency cut seven months ago in the early days of the coronavirus pandemic.

New applications for unemployment benefits fell slightly in late October, but they are only declining very slowly and signal ongoing stress in the U.S. labor market.  Initial jobless claims filed through state programs fell by 7,000 to 751,000 in the seven days ended Oct. 31.  Altogether, the number of people receiving benefits from eight separate state and federal programs declined by are still 21.5 million. 

Mortgage rates sank to another low for the 12th time this year, according to Freddie Mac, a government-sponsored agency that backs millions of mortgages.  The rate on the 30-year fixed mortgage fell to 2.78%, down from 2.80% last week, which was the previous low on records tracing back to 1971. A year ago, the rate was at 3.69 percent.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones

U.S. stocks were sharply higher yesterday, led by technology stocks, even as the results of the presidential election so far failed to yield a clear winner.

Shares of ride hailing companies Uber and Lyft are sharply higher after Californians passed Measure 22 allowing the companies to be exempt from a labor law that aimed to make drivers employees instead of contractors.  The ballot measure will allow the companies to continue to operate in California as they currently do.

U.S. services industry activity slowed in October, with growth in new orders and employment moderating, likely reflecting concerns about ebbing fiscal stimulus and a resurgence in new COVID cases across the nation.  The Institute for Supply Management said their non-manufacturing activity index fell to a reading of 56.6 last month from 57.8 in September.  A reading above 50 indicates growth in the services sector, which accounts for more than two-thirds of U.S. economic activity. 

Shares of Qualcomm are sharply higher as their revenue and adjusted earnings per share handily beat Wall Street expectations.  The company is a huge beneficiary of the 5G movement.
 
With Northwest Quadrant Wealth Management, I’m Tyler Simones

Private job creation showed a sharp deceleration in October as the U.S. economy struggled against a resurgent coronavirus.  US Companies added 365,000 positions for the month, well below the 600,000 estimated by economists. That was the lowest reported gain since July.

The Commerce Department said that factory orders rose 1.1% after climbing 0.6% in August. Orders were boosted by increased demand for metals, computers and electronic products as well as motor vehicles and fabricated metal. But orders for machinery, furniture, electrical equipment, and appliances fell.  Manufacturing, which accounts for 11.3% of U.S. economic activity, has been boosted by a shift in spending from services toward goods as Americans set up home offices and remote classrooms and avoid public transportation.

The cruise industry has jettisoned hopes of restarting operations this year.  Days after both Carnival and Norwegian extended a halt on cruises through the end of the year, the group, Cruise Lines International, that represents cruise lines with 95% of global ocean-going capacity said that their members have agreed to extend the suspension of U.S. sailing operations for the rest of 2020.

With Northwest Quadrant Wealth Management, I’m Tyler Simones

The New York Stock Exchange is on pace to regain the U.S. stock market listings crown from rival Nasdaq this year after attracting bigger blank-check company IPOs than Nasdaq. So far, companies have raised $66B through listings on NYSE this year vs. $61B on Nasdaq (almost two-thirds of the proceeds raised on NYSE came from special purpose acquisition companies. 

S&P Global Ratings sees global debt, as a percentage of GDP, swelling to a record 265% this year, and insolvencies and defaults rising to levels not seen since the 2009 crisis. A near-term crisis, though, is unlikely given the expected economic recovery, a COVID-19 vaccine by mid-2021, favorable financing conditions, and sovereign, corporate and household spending and borrowing behaviors. "The heavier corporate debt will delay the recovery of credit metrics beyond 2022 for the hardest hit sectors (such as airlines, leisure and oil and gas)," according to the report. 

While recent pressure on equity markets could be easing, oil prices slid on lingering worries that international lockdowns will sap energy demand. Off by nearly 6% overnight, crude futures have pared some losses this morning.  Libya and Iraq are also boosting their production, causing a rise in overall supply from OPEC , despite having reduced quotas across its other members. While the group meets again on Nov. 10 and Dec. 1 to discuss policy, there doesn't appear to be a great deal of leeway for further reductions.

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