Money Talk Podcast

Landaas & Company newsletter  May edition now available. Advisors on This Week’s Show Brian Kilb Art Rothschild Dave Sandstrom (with Max Hoelzl and Joel Dresang) Week in Review (May 2-6, 2016) Significant economic indicators & reports Monday The Commerce Department said construction spending rose 0.3% in March, which was lower than analysts expected. Spending on […]

Landaas & Company newsletter  May edition now available. Advisors on This Week’s Show Bob Landaas Brian Kilb Kyle Tetting Dave Sandstrom (with Max Hoelzl and Joel Dresang) Week in Review (April 25-29, 2016) Significant economic indicators & reports Monday The housing recovery kept bouncing along as new home sales slowed in March for the third […]

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Landaas & Company newsletter  April edition now available.

Advisors on This Week’s Show

Bob Landaas

Brian Kilb

Kyle Tetting

Art Rothschild

(with Joel Dresang and Max Hoelzl)

Week in Review (April 18-22, 2016)

Significant economic indicators & reports

Monday

No major releases

Tuesday

Signs of a continued bumpy housing recovery came from a Commerce Department report showing the annual pace of housing starts declining more than expected in March, though rising from the year-ago rate. Builders began working on houses at the slowest pace since October. Single-family residences, which account for 70% of the starts, remained below the 56-year average. Building permits, which suggest upcoming housing starts also fell, led by applications for multi-family units.

Wednesday

The National Association of Realtors reported higher-than-expected existing home sales in March. The trade group repeated complaints of depressed inventory and rising prices suppressing sales. The median price rose 5.7% from March 2015 for the 49th consecutive year-to-year increase. Existing home sales have been outnumbering new home sales by about 10-to-1.

Thursday

The moving four-week average for initial unemployment claims fell for the second week in a row, approaching a recent mark that was the lowest level since late 1973. Labor Department data show claims staying 28% below the 49-year average, suggesting employers’ continued reluctance to let workers go. Layoffs have been below the long-term average every week since January of 2013.

The Conference Board’s index of leading economic indicators rose less than expected but improved for the first time in three months. Gains in stock prices offset the slump in building permits. Otherwise the business research group reported a broad but mild advance in other indicators, which suggests “slow, although not slowing growth” in coming quarters and a modest expansion for the year.

Friday

No major releases

Where the Markets Closed for the Week

Nasdaq – 4,906, down 32 points or 0.6%

Standard & Poor’s 500 – 2,092, up 11 points or 0.5%

10-year U.S. Treasury Note – 1.88%, up 0.13 point

Dow Jones Industrial – 18,004, up 107 points or 0.6%

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Landaas & Company newsletter  April edition now available.

Advisors on This Week’s Show

Brian Kilb

Steve Giles

Dave Sandstrom

(with Max Hoelzl and Joel Dresang)

Week in Review (April 11-15, 2016)

Significant economic indicators & reports

Monday

No major reports released

Tuesday

No major reports released

Wednesday

In another sign that the Federal Reserve can afford continued patience in raising short-term interest rates, wholesale inflation remained low in March. The Bureau of Labor Statistics said the Producer Price Index retreated 0.1% from February, the fifth decline in the last eight months. The price of services and food held back the index. Energy prices rose for the first time since November. More telling, the 12-month inflation rate sank 0.1%, although it rose 0.9%, excluding volatile energy and food prices. That core gain fell short of the Federal Reserve Board’s general target of 2% inflation.

A prime sign of consumer spending, which drives 70% of U.S. economic activity, inched backward in March as retail sales dropped 0.3%. The Commerce Department reported higher sales in eight of 13 categories, including gas stations, which benefited from higher prices. Car dealers led the handful of retailers with shrinking revenue. Year-to-year, retail sales rose 1.7%, below the 4.4% long-term pace. Home-and-garden store sales gained 10.8% in the last year while gas station receipts fell 15.6%.

In a separate report, Commerce said business inventories declined slightly in February but not as much as sales. The inventories-to-sales ratio remained at its highest level since the Great Recession, suggesting companies are still overestimating demand, which tends to hamper further growth in production and hiring.

Thursday

The broadest measure of inflation, the Consumer Price Index, inched ahead in March, rising for the first time in four months. The Bureau of Labor Statistics said gasoline prices rose 2.2% last month, also the first increase since November, although gas is down nearly 21% from March 2015. In the last 12 months, inflation has risen 0.9%, or 2.2% excluding the volatile food and energy prices. Although it’s not the Fed’s preferred measure of inflation, it’s closer to the central bank’s sweet spot for sustainable economic growth.

The moving four-week average for initial unemployment claims fell for the first time in four weeks, when it hit the lowest point since December 1973. Data from the Labor Department show jobless claims continuing to stay under the 49-year average, signaling employers’ enduring reluctance to let workers go. That should help secure jobs and raise pay, which tend to fuel consumer confidence and spending.

Friday

Although oil prices have started to rebound and the strong dollar to weaken, the Federal Reserve reported lower industrial production data in March, the fifth fall in six months. Mining output was down 12.9% from the year before and utilities declined 7.7%. Manufacturing eked out a 0.4% year-to-year gain, but fell for the second month in a row, largely because of slower automotive production. The telltale capacity utilization rate – including factories, mines and utilities – sank to the lowest point since August 2010, indicating much less pressure on inflation.

The University of Michigan said its preliminary consumer sentiment reading for April showed further erosion in Americans’ financial expectations for coming months. Consumers remain relatively content with current economic conditions, but overall sentiment has diminished four months in a row, suggesting a decreasing appetite for consumption.

Where the Markets Closed for the Week

Nasdaq – 4,938, up 87 points or 1.8%

Standard & Poor’s 500 – 2,081, up 33 points or 1.6%

10-year U.S. Treasury Note – 1.75%, up 0.03 point

Dow Jones Industrial– 17,897, up 320 points or 1.8%

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Landaas & Company newsletter  April edition now available.

Advisors on This Week’s Show

Bob Landaas

Brian Kilb

Marc Amateis

Steve Giles

(with Max Hoelzl and Joel Dresang)

Week in Review (April 4-8, 2016)

Significant economic indicators & reports

Monday

In a reminder of slowing economies globally, U.S. factory orders fell more than expected in February, declining for the third time in four months. The Commerce Department reported the volatile indicator showed manufacturing contracts fell 1.7% from February 2015. Orders for non-military capital goods, excluding aircraft – a proxy for business investments – was down 1% from the same time last year.

Tuesday

Uneven resilience in the U.S. economy shined through a better-than-expected March report from the ISM Non-manufacturing Index. Purchasing managers from the largest segment of the U.S. economy said their companies were expanding for the 74th months in a row. Though still below its 12-month average, the index registered its highest mark since December.

The U.S. trade deficit widened in February for the third month in a row and more than analysts had expected. The Bureau of Economic Analysis said the gap between how much the U.S. sells abroad and buys from elsewhere expanded to $47.1 billion, the biggest deficit in six months. Exports rose for the first time in five months, hampered by a weaker global economy and the strong dollar, which raises prices abroad. Imports grew even more so, led by consumer goods.

American employers had slightly fewer job openings in February, though the number of hires rose to its highest level since November 2006. The Bureau of Labor Statistics said both the number and the rate of quits ticked up in February, suggesting employees are gaining confidence in their ability to find better jobs.

Wednesday

No significant reports released

Thursday

The moving four-week average for initial unemployment claims rose for the third week in a row after reaching a 42-year low in March. According to the Department of Labor, average claims remain below the 49-year average, suggesting employers continue to be reluctant about letting workers go. Eventually, such conditions tend to lead to the job and wage improvements that drive consumer spending, which accounts for more than two-thirds of U.S. economic activity.

The Federal Reserve reported that consumer credit rose higher than analysts expected in February. Borrowing for cars and college again led the types of debt accumulated. Meanwhile, revolving credit – mostly credit card debt – bounced back from a contraction in January, suggesting consumers are gaining confidence in spending more.

Friday

The Commerce Department reported that wholesale inventories declined for the fifth month in a row in February as businesses try to align their supply levels with customer demands. Sales fell for the fourth consecutive month, but at a slightly lower rate. As a result, the tell-tale ratio of inventories to sales dipped slightly, though it remained at levels last registered during the recession.

Where the Markets Closed for the Week

Nasdaq – 4,851, down 64 points or 1.3%

Standard & Poor’s 500 – 2,048, down 25 points or 1.2%

10-year U.S. Treasury Note – 1.72%, down 0.07 point

Dow Jones Industrial – 17,577, down 216 points or 1.2%

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Landaas & Company newsletter  April edition now available.

Advisors on This Week’s Show

Kyle Tetting

Marc Amateis

Adam Baley

(with Max Hoelzl  and Joel Dresang)

Week in Review (March 28-April 1, 2016)

Significant economic indicators & reports

Monday

Consumer spending – accounting for more than two-thirds of U.S. economic activity – barely budged in February, according to the Bureau of Economic Analysis. Even though personal income gained 0.2% from January, consumers elected to pocket much of the money, raising the personal savings rate to 5.4% of disposable income, the highest in a year. On a year-to-year basis and adjusting for inflation, consumer spending rose 2.8%, the highest since October and above the 16-year average rate of 2.3%. The Fed’s favorite measure of inflation remained below the central banks’ target of 2%.

Tuesday

The uneven housing recovery continued driving up prices in January, according to the S&P/Case-Shiller Home Price Index. The 20-city composite index rose 5.7% from January 2015, the 46th consecutive rise in year-to-year prices. The index is nearing its level before the recession. A housing economist for Standard and Poor’s cited low inventories for the pricing pressure. He blamed lending requirements for restricting many would-be home buyers with sizable student loans and credit card debt.

Higher prices in the stock markets helped raise consumer confidence in March, according to the Conference Board. The business research group’s monthly index suggested consumers’ financial outlooks dipped and then recovered along with stock prices in the first three months of 2016. Economists consider consumer confidence a leading indicator of consumer spending.

Wednesday

No major reports released

Thursday

The moving four-week average for initial unemployment claims rose for the second time in two weeks after hitting its lowest level since December 1973. Labor Department data show claims continue to remain at levels suggesting that employers are reluctant to let go of their workers. Average claims are down 60% since their recession peak. They’re 27% below the 48-year average.

Friday

Employers added more jobs than expected in March, and the unemployment rate rose to 5%, largely because more jobseekers entered the pool. The latest figures from the Bureau of Labor Statistics show a relatively healthy hiring climate except for manufacturing, which has been held back by a weak global economy, and mining, which has been hit by low commodities prices. The average hourly wage rose slightly after declining in February.

U.S. manufacturing expanded in March for the first time since August, according to the Institute for Supply Management. The trade group’s manufacturing index showed 13 of 18 industries surveyed reporting a rise in new orders. Production also rose notably from February. However, hiring contracted for the fourth month in a row.

The Commerce Department said the pace of construction expenditures declined in February, disappointing analysts. Spending on residential building – which accounts for about 40% of the total – rose slightly from January and gained 10.5% from the year-ago pace, remaining a significant contributor to the country’s moderate economic growth. Public construction of schools, roads and sewers decreased.

Adjusted for inflation, Americans’ personal financial outlook rose to its highest level since before the recession, according to the March consumer sentiment index from the University of Michigan. Though slightly below its February reading, the index has been relatively steady since June. A Michigan economist said the index suggests consumer spending should grow about 2.7% for 2016.

Where the Markets Closed for the Week

Nasdaq – 4,915, up 141 points or 2.9%

Standard & Poor’s 500 – 2,073, up 37 points or 1.8%

10-year U.S. Treasury Note [...]

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Landaas & Company newsletter  March edition now available.

Advisors on This Week’s Show

Bob Landaas

Brian Kilb

Kyle Tetting

Dave Sandstrom

(with Max Hoelzl)

Week in Review (March 21-25, 2016)

Significant economic indicators & reports

Monday

In a sign of the choppy housing recovery, existing home sales slowed in February. The National Association of Realtors said members sold an annual rate of nearly 5.1 million houses, down 7% from January but 2% ahead of the year-ago pace. The trade group blamed a Northeast blizzard and slumping stock prices for the February setback but continued to cite lack of inventory and affordability as challenges. The median sales price rose 4.4% from February 2015, the 48th consecutive increase.

Tuesday

A biennial study on retirement confidence showed again that American workers who have plans for their retirement are more likely to feel secure about their financial future. The 26th report from the Employee Benefit Research Institute delivered mix messages, including survey results showing that Americans collectively are feeling more secure about their retirements while also saving less for it. Another finding from the comprehensive research shows that a higher percentage of workers expect to retire by 65 than the percentage of retirees who actually left the workforce that young.

Wednesday

The annual sales rate of new houses rose 2% in February, though it was 6% off from the year-ago pace, the Commerce Department reported. Only Western states increased sales from January, according to the report. The supply of new houses was unchanged from the previous month but grew by 24% from February 2015.

Thursday

A volatile measure of U.S. manufacturing strength, durable goods orders, sank less than expected in February, reflecting the global economic slowdown and weak U.S. dollar. The Commerce Department said commercial aircraft orders led the decline, but orders excluding the volatile transportation sector also dropped – for the third month in four. Orders for non-military capital goods excluding aircraft also fell for the third time in four months, a sign of weaker investments in business equipment.

Employers continued hanging on to workers for the most part even as the moving four-week average for initial unemployment claims rose for the first time in seven weeks. The Labor Department released data showing average claims below the 300,000 level for the 55th week in a row, the longest streak since 1973.

Friday

The U.S. economy grew at a 1.4% annual rate in the last three months of 2014, down from 2% in the third quarter but up from previous estimates of 0.7% and 1%. In its final estimate of fourth-quarter Gross Domestic Product, the Bureau of Economic Analysis said the rate of consumer spending rose at 2.4%, also brisker than earlier estimates but below the 30-year average of 3%. The report also showed corporate profits before taxes falling the most since the recession, while the Fed’s preferred inflation indicator dropped to 1.1%, further below the 2% target.

Where the Markets Closed for the Week

Nasdaq – 4,774, down 23 points or 0.5%

Standard & Poor’s 500 – 2,036, down 13 points or 0.6%

10-year U.S. Treasury Note – 1.9%, up 0.02 point

Dow Jones Industrial – 17,516, down 83 points or 0.5%

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Landaas & Company newsletter  March edition now available.

Advisors on This Week’s Show

Brian Kilb

Kyle Tetting

Marc Amateis

Art Rothschild

(with Max Hoelzl and Joel Dresang)

Week in Review (March 14-18, 2016)

Significant economic indicators & reports

Monday

No major announcements

Tuesday

The Bureau of Labor Statistics said wholesale inflation dipped in February for the second time in three months, led by a 3.4% decline in energy prices. Excluding food and energy, the core Producer Price Index rose 0.1%. Year-to-year, which usually is a more telling measure, the index was unchanged, but the core increased by 0.9%, the most since July. The Federal Reserve Board has been watching for inflation to increase as a sign that the economy is growing at a sustainable pace.

With consumer spending accounting for about two-thirds of economic output, the Commerce Department’s report on February retail sales suggested reluctance. Sales sank for the second consecutive month, with eight of 13 retail categories reporting declines. Home-and-garden stores, sporting goods outlets and restaurants led the gainers. Year-to-year, retail sales rose 3.1%, down from the long-term average of 4.4%.

In a sign that companies continue to overestimate demand for their products, business inventories rose in January while sales kept falling. The Commerce Department showed the ratio between inventories and sales reaching the highest point since May 2009 – during the recession, suggesting at least a temporary impediment to increases in production and employment.

Wednesday

The second month in a row of increased factory production was not enough to offset declines from utilities and mining operations in February. The Fed reported that industrial production fell for the fourth time in five months. Hampered by the global economic slowdown and relative strength of the U.S. dollars, gains in manufacturing offered a silver lining. Capacity utilization, an indicator of inflation prospects, also declined.

The departments of Commerce and Housing and Urban Development reported mixed news on the housing recovery. Housing starts rose 5.2% in February to an annual pace of 1.18 million new houses, but building permits – an indicator of future construction – fell 3.1% from the January rate. Permits are at about twice the pace they dropped to during the recession and only about half of the peak levels set in 2005 and 1972.

The broadest measure of inflation showed signs of economic growth in February. Although the broad Consumer Price Index fell slightly from its level in January – led by a continued slump in gas prices, the core index (excluding energy and food) rose 2.3% from February 2015. That was the biggest year-to-year increase since 2002, according to the Bureau of Labor Statistics.

Thursday

The moving four-week average for initial unemployment claims rose for the first time in six weeks, still hovering around 33-year lows. Data from the Labor Department showed jobless claims remaining below the 49-year average, where they have been every week for more than three years. The apparent reluctance by employers to let go of their workers brightens the prospects for further hiring and wage gains, which fuel consumer spending.

U.S. employers reported more than 5.5 million job openings in January, up 4.9% from December, which was quite lower than initially estimated. Openings rose 11.4% from January 2015 and remain near the record high set in July, according to the Bureau of Labor Statistics. The number of workers voluntarily quitting their jobs fell to the lowest level since October, suggesting a little less confidence in other job prospects.

The U.S. economy will continue growing moderately at least through mid-year and has “little chance of a downturn in the near-term,” according to the Conference Board. The business research group said its [...]

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Landaas & Company newsletter  March edition now available.

Advisors on This Week’s Show

Bob Landaas

Brian Kilb

Steve Giles

Kyle Tetting

(with Max Hoelzl and Joel Dresang)

Week in Review (March 7-11, 2016)

Significant economic indicators & reports

Monday

With consumer spending accounting for more than two-thirds of the U.S. gross domestic product, analysts have been encouraged by months of rises in consumer credit. Much of the increase has been from growing debts from auto financing and student loans. But a key sign for analysts has been revolving debt from credit cards, which can indicate that consumers are more willing to spend when they don’t have cash on hand. The Federal Reserve reported that outstanding credit card debt decreased in January for the first time in 11 months.

Tuesday

No major announcements

Wednesday

Generally, increased inventories are a positive indicator of the confidence businesses have in selling their products. But lately, that confidence has outpaced sales, which concerns some economists that upcoming production and hiring could be curtailed. The Commerce Department said wholesale inventories rose 0.3% in January vs. a 1.3% drop in sales. That sent the ratio between inventories and sales to its highest mark since the Great Recession.

Thursday

The moving four-week average of initial unemployment claims fell for the fifth week in a row to the lowest since November, not far from its 42-year low set in October. A persistent lack of jobless applications suggests the hiring market remains robust, which should eventually lead to the wage increases that embolden consumers to step up their spending. Based on Labor Department data, jobless claims have been below the 48-year average every week for more than three years.

Friday

No major announcements

Where the Markets Closed for the Week

Nasdaq – 4,748, up 31 points or 0.7%

Standard & Poor’s 500 – 2,022, up 22 points or 1.1%

10-year U.S. Treasury Note – 1.98%, up 0.1 point

Dow Jones Industrial– 17,213, up 206 points or 1.2%

Send us a question for our next podcast.

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Landaas newsletter subscribers return to the newsletter via e-mail.

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Landaas & Company newsletter  March edition now available.

Advisors on This Week’s Show

Marc Amateis

Kyle Tetting

Steve Giles

Adam Baley

(with Max Hoelzl)

Week in Review (Feb. 29-March 4, 2016)

Significant economic indicators & reports

Monday

No major releases

Tuesday

Further signs of moderate U.S. economic growth showed in higher-than-expected construction spending in January. The Commerce Department reported that such expenditures rose to their highest point since before the Great Recession. Private construction spending also was the most since late 2007. Money spent on residential building rose 7.6% from the year before. Non-residential grew by 12.3% since January 2015, led by roadways, manufacturing and lodging.

Factory work contracted for the fifth month in a row in February, though at a slower rate and with the second consecutive expansion in new orders. The Institute for Supply Management’s manufacturing index reflects struggles from a slumping global economy and the ripple effects of weak oil prices. Of 18 industries surveyed by the trade group, nine said their businesses are growing.

The pace of motor vehicles sales dipped slightly in February but remained relatively robust at 17.5 million cars and trucks, according to AutoData Corp. The annual rate was up 7% from the year before. Cheap gas continued to drive more buyers to trucks than cars. Strong vehicle sales suggest healthy consumer spending, which is responsible for about two-thirds of U.S. economic growth.

Wednesday

The Federal Reserve Board suggested continued moderate to modest economic growth in its beige book, an anecdotal region-by-region analysis of economic activity. The Fed district based in Kansas City was the lone region to suffer a setback, due to the cutbacks among energy-related concerns in the area. The central bank noted general optimism from business executives it contacted across the country.

Thursday

More evidence that the weakness in manufacturing could be abating showed in a gain of factory orders in January. Though it’s a volatile indicator, new orders posted their first gain in three months, largely because of requests for commercial aircraft. The Commerce Department reported that except for transportation equipment, orders declined slightly. Preliminary sales for non-defense capital goods excluding aircraft – an indicator of business plans to invest in themselves – rose solidly.

The moving four-week average for initial unemployment claims fell for the fourth week in a row, reaching its lowest point since November. According to data from the Labor Department, new jobless claims have stayed below the 49-year average since early 2013, suggesting that employers have been persistently reluctant to let workers go.

U.S. worker productivity did not decrease as much as initially estimated in the fourth quarter as output actually rose slightly while hours worked increased. The Bureau of Labor Statistics said the annualized rate of productivity fell 2.2% for the last three months of 2015. The annual average productivity advanced 0.7% from 2014, about one-third of the average since World War II. The weakness suggests a need for more hiring and business investment.

The Institute for Supply Management’s non-manufacturing index showed the 73rd consecutive month of expansion in February. Growth for the nation’s largest economic sector slowed a smidgen from January, but business activity quickened its pace. Hiring in the sector contracted. Purchase managers surveyed for the trade group’s report expressed satisfaction with current conditions and some optimism toward the economy overall.

Friday

U.S. employers added more jobs in February than analysts had forecast, about 6% more than the three-month average and 30,000 more in December and January than previously estimated. The closely watched report from the Bureau of [...]