Financial Review

Big Tech Rolls

Sinclair Noe — October 27, 2017

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DOW + 33 = 23,434
SPX + 20 = 2581
NAS + 144 = 6701 (record)
RUT + 10 = 1508
10 Y – .02 = 2.43%
OIL + 1.39 = 54.03
GOLD + 7.00 = 1274.20

Cryptocurrency

• Number of Currencies: 881
• Total Market Cap: $169,584,853,512
• 24H Volume: $3,030,726,031

Top Cryptocurrencies

	Name	Symbol	Price USD	Market Cap	Vol.	Total Vol. %	Price BTC	Chg. % 1D	Chg. % 7D
	Bitcoin	BTC	5,763.0	$96.48B	$1.38B	45.66%	1	+0.06%	-4.89%
	Ethereum	ETH	294.13	$28.39B	$260.01M	8.58%	0.0515573	-0.63%	-0.26%
	Ripple	XRP	0.19869	$7.78B	$26.00M	0.86%	0.00003499	-0.41%	-1.55%
	Bitcoin Cash	BCH	389.71	$6.62B	$642.56M	21.20%	0.0684542	+6.64%	+22.31%
	Litecoin	LTC	54.550	$2.94B	$69.39M	2.29%	0.00950861	-1.27%	-5.37%
	Dash	DASH	270.00	$2.09B	$44.65M	1.47%	0.0474148	-3.66%	-2.04%
	NEM	XEM	0.19693	$1.79B	$4.75M	0.16%	0.0000344	+0.48%	-4.75%
	BitConnect	BCC	213.397	$1.56B	$11.33M	0.37%	0.0369607	+0.59%	+0.95%
	NEO	NEO	27.740	$1.38B	$22.50M	0.74%	0.00477785	-3.95%	+1.75%
	Monero	XMR	85.71	$1.32B	$24.67M	0.81%	0.014969	-0.45%	-1.82%

For the week, the Dow rose 0.5%, the S&P 500 gained 0.2% and the Nasdaq advanced 1.1%. The S&P has notched gains for seven straight weeks, its longest weekly winning streak in three years. The Russell 2000 index was down 0.1% for the week. Who needs small caps, when the big tech stocks are going crazy?

For the year to date: The S&P 500 is up 342.24 points, or 15.3%. The Dow is up 3,671.59 points, or 18.6%. The Nasdaq is up 1,318.15 points, or 24.5%. The Russell 2000 is up 151.19 points, or 11.1%.

We knew this was going to be a big day for the tech sector after several companies reported strong earnings after the closing bell yesterday. The S&P technology index led the way higher, up 2.9%. The index notched its best day since March 1, 2016 and is up nearly 35% on the year versus the 15-percent gain in the S&P 500.

Google-parent Alphabet gained 4.2% as its revenue got a boost from advertising sales. Microsoft jumped 6.4% after the world’s largest software company reported further gains from its cloud computing services.

Apple rose 3.5% after the company allayed concerns of muted demand for its 10th anniversary phone. The iPhone X, unsurprisingly, sold out of its pre-orders within ten minutes. Or, at least, the pre-orders it allocated to its website. Likely pre-orders are also sold out at its retail operations at this point, too.

Intel soared 7.3% after its quarterly results topped estimates and the chipmaker raised its full-year forecasts. And Amazon, gained 13.2% after reporting a quarterly sales surge and better than expected earnings. Amazon of course is already ubiquitous—an estimated two-third of US households subscribe to its Prime membership program.

But aside from the packages that come to your door and a few forays into hardware, the company can still grow sales by 35% in North America and their cloud business saw sales jump 42%. For Jeff Bezos, this was about a $7 billion day, meaning he may now be the world’s richest man.

Both Amazon and Google now trade above $1,000. Apple, Amazon, Alphabet, Microsoft; these are the new blue chips. Maybe toss in Facebook, Netflix, and Nvidia.

Today, the FAANG stocks added $181 billion in market capitalization in just a few hours of trading. For the sake of comparison, Goldman Sachs has a market cap of $93 billion. This year so far has been a big one for these companies, which have added nearly $1 trillion in value. They might top that mark next week, when Facebook and Apple report earnings.

If you own at least a few of these stocks, and you have just been holding, you have been rewarded. Even as these stocks have grown massively they can still deliver growth that seems more like a small cap stock sprinting out the gate. That does not mean they will continue to go up in a nearly straight line – they all face certain challenges but they all remain innovative and profitable until further notice.

Trump likes to claim credit for the record highs on Wall Street, even though we have been in a bull market for more than 8 years. And what he doesn’t mention is that the rest of the world has gotten richer, faster at the same time. American equities are now worth $28.4 trillion, having swelled by almost $3 trillion since he took office in January. But they’ve lost ground against the rest of the world.

All stocks across the globe are valued at $89.9 trillion. US shares make up only 31.6 percent of that total. That’s the lowest proportion since November 2011, or a few months after the U.S. flirted with default. And it’s sunk from the 11-year high of 38.3 percent set in December under then-President Obama.

Earnings growth for the third quarter is now 6.7 percent, according to Thomson Reuters data. Of the 273 companies that have posted earnings, 74 percent have topped expectations, compared with the 72 percent beat rate over the past four quarters. Not all earnings were positive, however. Chevron’s 4.14 percent fall weighed on the S&P and the Dow after the oil company’s profit missed estimates.

The nation’s gross domestic product expanded at an annual rate of 3 percent in the third quarter, according to the Commerce Department’s first estimates. Economists initially expected that Hurricanes Harvey and Irma would deal a blow to the country’s steady growth, but destruction wrought by the storms was outweighed by the continued spending of consumers and businesses.

The economy is experiencing its fastest growth spurt in two consecutive quarters since 2014, but it is highly unlikely that growth for the year will reach 3 percent. The first quarter was tepid, and projections for the current quarter hover around 2.8 percent.

Personal consumption, although down from the previous quarter, grew at a 2.4 percent rate, and nonresidential fixed investment, a measure of business spending, expanded at a robust rate of 3.9 percent.

Spending on equipment increased at a rate of 8.6 percent, as companies poured money into capital improvements. Businesses may be investing in computers and industrial equipment in response to a tight labor market.

It can be hard to accurately measure the full effect of a natural disaster immediately after it occurs. Hurricanes Harvey and Irma left 600,000 to one million vehicles needing replacement. Car sales spiked in September, reaching their highest level since 2005.

Those car purchases are counted toward GDP growth, but the destruction of all those cars is not subtracted. The 3% GDP growth figure released was the government’s first estimate of economic output for the quarter, and it will be revised twice.

The government in Madrid, Spain sacked Catalonia’s president and dismissed its parliament, hours after the region declared itself an independent nation. A new regional election will be held in Catalonia on Dec. 21.

As well as removing Carles Puigdemont as head of the autonomous region, Prime Minister Mariano Rajoy also fired its police chief and said central government ministries would take over the Catalan administration. Several European countries, including France and Germany, and the United States also rejected the independence declaration and said they supported efforts to preserve Spain’s unity.

The crisis has now reached a new and possibly dangerous level as independence supporters have called for a campaign of disobedience. The main secessionist group, the Catalan National Assembly, called on civil servants not to follow orders from the Spanish government and urged them to follow “peaceful resistance”.

CVS Health has made an offer to acquire Aetna for more than $200 per share, or over $66 billion, making it the biggest deal of the year. Yesterday Amazon.com has received wholesale pharmacy licenses in several states and is planning to move into online prescription drug sales, potentially posing an existential threat to brick-and-mortar pharmacies.

That possibility has hit shares of most drugstore operators on fears that the online retailer would leverage its vast ecommerce platform in prescription drug sales. A CVS-Aetna deal could create a one-stop shop for customers’ health care needs – ranging from employer healthcare and government plans to managing benefits and running drug stores.

This has not been an easy year for brick and mortar retailers and today, JC Penney took a hard hit, down 15% after warning of a deeper-than-expected loss in the third quarter. The retailer is trying to revamp its apparel inventory by liquidating less popular items. While the effort will lead to a comparable-store sales gain, it was a costly endeavor, resulting in a loss last quarter.

The move spotlighted key problems for the department-store field: hard-to-sell inventory and a reliance on deep discounts to move stock. J.C. Penney also has been shuttering poor-performing stores in a bid to better match supply with demand.

It has been a very bad week for General Electric. GE cut cash and profit forecasts while reporting earnings that fell well short of Wall Street estimates. Investors are also bracing for a possible dividend cut. Shares dropped every day this week pushing the stock down 13% on the week. That was GE’s worst weekly drop since March 2009. With about $26 billion of market value wiped out over the past five days, the loss for GE shareholders this year has now reached $100 billion

Volkswagen reported net profit in the third quarter fell about 50 percent, to 1.1 billion euros, or $1.3 billion, after the company set aside €2.6 billion to cover the unexpectedly high cost of repairing diesel cars in the United States that contained illegal, emissions-cheating software. VW had warned last month that the emissions scandal would cut into earnings.

After VW admitted to the scandal, the company vowed it will make electric cars affordable for the masses. One way that Volkswagen was able to still report a profit in the quarter, though, was by cutting spending on research and development. So, in a twisted sort of way, the cost of the scandal is hurting the transition to clean electric cars.

National monuments in Utah are shrinking. The Trump administration has decided to reduce the size of the Bears Ears National Monument and Grand Staircase-Escalante National to make way for more industrial activity on the land they occupy. A coal deposit lies beneath Grand Staircase, but an archeological site where two dozen new species of dinosaurs have been discovered is located there, too, and paleontologists are now worried it could be destroyed if the monument’s size is reduced.

Navajo Nation Attorney General Ethel Branch, said: “The Navajo Nation stands ready to defend the Bears Ears National Monument. We have a complaint ready to file upon official action by the President.”

Financial Review

Populist Airlines

Sinclair Noe — September 29, 2017

Podcast: Play in new window | Download (Duration: 13:15 — 7.6MB)

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DOW + 23 = 22,405
SPX + 9 = 2519
NAS + 42 = 6495
RUT + 2 = 1490
10 Y + .02 = 2.33%
OIL + .02 = 51.58
GOLD – 7.30 = 1280.40

Cryptocurrency

• Number of Currencies: 875
• Total Market Cap: $144,091,472,388
• 24H Volume: $2,973,138,963

Top Cryptocurrencies

	Name	Symbol	Price USD	Market Cap	Vol.	Total Vol. %	Price BTC	Chg. % 1D	Chg. % 7D
	Bitcoin	BTC	4,223.6	$69.82B	$1.24B	41.78%	1	+1.29%	14.75%
	Ethereum	ETH	297.53	$28.06B	$468.41M	15.75%	0.0701408	+1.66%	11.27%
	Ripple	XRP	0.20097	$7.54B	$61.48M	2.07%	0.00004662	+2.01%	13.40%
	Bitcoin Cash	BCH	444.59	$7.33B	$131.32M	4.42%	0.104608	+0.66%	6.29%
	Litecoin	LTC	53.830	$2.86B	$161.90M	5.45%	0.0127453	+2.30%	12.30%
	Dash	DASH	334.26	$2.51B	$35.38M	1.19%	0.0783484	+1.85%	-5.31%
	NEM	XEM	0.23374	$2.10B	$4.39M	0.15%	0.00005536	-1.16%	10.16%
	IOTA	MIOTA	0.59181	$1.65B	$13.16M	0.44%	0.00014036	+1.25%	14.72%
	NEO	NEO	29.990	$1.50B	$66.41M	2.23%	0.00710315	+4.58%	57.16%
	Monero	XMR	95.84	$1.45B	$36.12M	1.21%	0.0226348	+0.89%	7.94%

The S&P, Nasdaq and Russell 2000 closed at records for the third straight day and the benchmark S&P index posted its sixth straight month of gains. Add another notch in the over 8-year old bull market.

Today marked the 38th session in 2017 in which the S&P 500 hit an intraday record level. September is normally a bad month in the markets but not this year. For September, the Dow gained 2.1 percent, the S&P rose 1.9 percent and the Nasdaq advanced 1.05 percent.

Of the 11 primary S&P 500 sectors, nine posted positive returns over the month. And while Apple has stumbled in September, it remains the biggest contributor to the S&P for the year to date. Even the dollar posted a monthly gain for the first time since February.


And the third quarter numbers are good across the board with basically all regions, sectors, commodities, and bond categories seeing gains over the period. The S&P 500 and the Dow Industrials have posted 8 consecutive winning quarters. The S&P has gained a little over 33% in that 2 year stretch and the Dow is up about 37%.

The fourth quarter is historically the strongest of the year. Since 1950, the S&P gains an average of 3.9% over the quarter, and the final three months of the year are positive nearly 80% of the time. For the third quarter, the Dow gained 4.9%, the S&P up 4%, the Nasdaq Composite was up 5.8%, and the Russell 2000 added 5.4%.

A couple of days since Trump unveiled his tax proposal, claiming it would be the “biggest ever” tax cut. He called it a “middle class miracle”. The only miracle would be if the middle class saw the tax cuts.

We are now getting analysis of the proposal. The Tax Policy Center crunched the numbers to come up with a preliminary estimate of the plan’s costs and beneficiaries. The biggest winner would be the richest 1 percent of U.S. taxpayers, who would get more than half of the benefits of the plan.

Over time, the plan would increase the tax burden on about 28 percent of middle-class workers. And, if enacted, the package would blow a $2.4 trillion hole in the federal budget. The deficit hawks and austerity mongers have fallen strangely silent.

The tax legislation can advance only after House and Senate passage of the budget blueprint. The Senate Budget Committee intends to vote on its plan next week. A companion measure is headed for a House vote next week as well.

The new budget plan would permit the upcoming tax measure to add $1.5 trillion over the coming decade to the $20 trillion national debt. The Tax Policy Center finds the GOP tax plan would reduce federal revenues by $2.4 trillion over the next decade. That means the plan will most likely have to change substantially to make the math work.

One option would be to further eliminate deductions to squeeze another $700 billion in tax revenue into the plan. It is going to be hard to find offsets, and many proposals will meet stiff resistance from interest groups.

Health and Human Services Secretary Tom Price has resigned his post just a week after it was learned he was a frequent flyer on chartered and military flights that cost American taxpayers more than $1 million.

Politico first reported that Price had frequently chartered private jets to travel around the country, breaking a long-standing precedent from his predecessors who often flew commercial. There were dozens of private flights, costing more than $400,000, since May. Plus, Price also flew to Africa, Europe and Asia this spring on military aircraft at a cost of more than $500,000.

Price’s departure comes as several other members of the Trump administration are under fire for their proclivity for using private jets. Interior Secretary Ryan Zinke, EPA Administrator Scott Pruitt and Treasury Secretary Steve Mnuchin have all used such aircraft at taxpayer’s expense.

Consumer spending barely rose in August likely as Hurricane Harvey weighed on auto sales, while annual inflation increased at its slowest pace in nearly two years, pointing to a moderation in economic growth in the third quarter.

Consumer spending edged up 0.1 percent last month, which followed a 0.3 percent increase in July. Part of the weakness is likely attributable to hurricane Harvey. However, the government could not separately quantify the total impact of Harvey on the data.

Inflation remained muted in August, with the personal consumption expenditures (PCE) price index excluding food and energy rising 0.1 percent. The so-called core PCE has advanced by the same margin for four straight months. As a result, the annual increase in the core PCE price index slowed to 1.3 percent in August after advancing 1.4 percent in July.

That was the smallest year-on-year increase since November 2015. The core PCE is the Fed’s preferred inflation measure and has been undershooting its 2 percent target since 2012. When adjusted for inflation, consumer spending slipped 0.1 percent in August, the first drop since January.

In the wake of the Equifax security breach, where the credit reporting company just forgot to protect 143 million American’s personal information – people have rushed to freeze their credit reports to prevent fraudulent activity. It’s a smart move. But what happens if everybody freezes their credit reports?

You can un-freeze your report if you want to open a new line of credit to buy something but that’s a bit of a hassle. The time required to remove restrictions could thwart issuance of new credit cards, especially store credit cards that offer instant discounts on purchases. Second thoughts could lead drivers to spend less on cars when they reconsider how much they will have to borrow for more expensive models.

Another day, another hack. Whole Foods is facing a credit-card security breach. The grocery chain, which Amazon acquired for $13.7 billion in late August, announced it “recently received information regarding unauthorized access of payment card information.”

People who only shopped for groceries at Whole Foods should not be affected, according to the company, which said only venues such as taprooms and table-service restaurants located within stores — which use a different point-of-sales system — were affected.

Puerto Rico is still trying to dig out from Hurricanes Irma and Maria. The situation is horrible and aid is not getting to people in need, not nearly fast enough anyway. It was just a matter of time before the vultures started circling.

Puerto Rico has rejected a bondholder group’s offer to issue the territory additional debt as a response to the devastation of Hurricane Maria. Officials with Puerto Rico’s Fiscal Agency and Financial Advisory Authority said the offer was “not viable” and would harm the island’s ability to recover from the storm.

The PREPA (Puerto Rico Electric Power Authority) Bondholder Group made the offer on Wednesday, which included $1 billion in new loans, and a swap of $1 billion in existing bonds for another $850 million bond. These new bonds would have jumped to the front of the line for repayment, and between that increased value and interest payments after the first two years, the bondholders would have likely come out ahead on the deal, despite a nominal $150 million in debt relief.

Indeed, the offer was worse in terms of debt relief than one the bondholder group made in April, well before hurricanes destroyed much of the island’s critical infrastructure. Puerto Rico’s Fiscal Agency and Financial Advisory Authority suggested that profit motive rather than altruism was the bondholder group’s real goal. The fiscal agency said creditor groups should “refrain from making unsolicited financing offers at the expense of the people of Puerto Rico.”

Volkswagen is taking another $3 billion charge to fix diesel engines in the United States, lifting the total bill for its emissions-test cheating scandal to around $30 billion. Last year, VW agreed with U.S. authorities to spend up to $15.3 billion to buy back or fix up to 475,000 2.0-litre polluting diesel cars.

On Friday, VW said it was setting aside an additional $3.0 billion as hardware fixes for the models were proving tougher than expected and would take significantly longer. Meanwhile in Germany, prosecutors said they had arrested a former Porsche management board member, the first top executive within the group to be detained amid a widening probe into cheating at VW’s Audi brand.

Electric vehicles now account for six of the ten fastest selling used car models in the US. Compared to the 33.4 days that conventional cars sit on the market, electric and plug-in electric hybrid vehicles now sell within 24.6 days on average, or 27% faster than gasoline cousins.

Although EVs accounts for just 1% of total US new car sales, their low price and rising reputation is leading to a brisk business. The FIAT 500e was the fastest selling used EV this year, in part due to its low average selling price of $9,055

Elon Musk has finally explained how SpaceX could make money: through a rocket that can both deliver goods to space and fly people from New York to Shanghai in 39 minutes. Musk made big promises for the reusable “B.F.R.” (the “B” stands for “big” and the “R” for “rocket”), as unveiled at the International Astronautical Congress in Adelaide, Australia.

He said it will be able to: Land on the moon; Ferry cargo and astronauts to the International Space Station;  Fly people around the world in less than an hour. And he claims he’ll do it for the price of economy on a regular plane.

Financial Review

Go Placidly

Sinclair Noe — May 19, 2017

Podcast: Play in new window | Download (Duration: 13:15 — 7.6MB)

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DOW + 141 = 20,804
SPX + 16 = 2381
NAS + 28 = 6083
RUT + 6 = 1367
10 Y + .01 = 2.23%
OIL + 1.18 = 50.53
GOLD + 8.80 = 1256.60

Stocks finished with triple digit gains but well off session highs as news headlines once again rattled traders. The Dow gave back more than 50 points and the S&P 500 saw gains cut in half following an afternoon news dump. The Washington Post is reporting that a current White House official is a significant person of interest in the law enforcement investigation.

Separately the New York Times reported that Trump told Russian officials at the White House that firing FBI Director James Comey relieved “great pressure” from an ongoing probe into Russia and the election. The Times report cited a document summarizing the meeting.

Trump is on the first leg of a ten-day overseas trip that starts in Saudi Arabia, then moves to Israel, the Vatican, Brussels (for a NATO summit), and then Sicily for a G7 summit. The Trump administration planned to announce $110 billion in sales of advanced military equipment and training to Saudi Arabia this weekend.

Despite the firing of James Comey, and a general sense from the mainstream media that the Trump White House is in disarray, and the lowest public approval ratings since the inauguration, Wall Street continues to trade near record highs.  For the week, the Dow and S&P dropped 0.4 percent and Nasdaq was down 0.6 percent.

The dollar index lost 1.6 percent in the five days, the worst week since July 2016. Gold capped its best week in a month. The yield on 10-year Treasuries climbed less than one basis point to 2.23 percent, after rising as much as three basis points earlier in the session. It fell nine basis points this week.

Oil prices rose. West Texas crude rose 2.2 percent to settle at $50.53 a barrel in New York, for a weekly increase of 5.4 percent, the most since March and the second week of gains, on growing expectations that OPEC and other producing countries will agree next week to extend output cuts.

OPEC and other producers including Russia are scheduled to meet on May 25. They are expected to extend output cuts of 1.8 million barrels a day until the end of March 2018. U.S. crude production has climbed 10 percent since mid-2016 to 9.3 million barrels per day as shale producers have taken advantage of higher prices to boost activity.

Iran holds its first round of presidential elections this weekend. If President Hassan Rouhani remains in office, it should encourage Western investment and boost Iranian oil production. If the winner is Ebrahim Raisi, a critic of Iran’s nuclear deal with the West, then it is possible that new sanctions could be imposed, which could reduce the oil supply from Iran.

After two weeks chock full of retailers’ earnings — largely disappointing Wall Street and missing analysts’ expectations — the S&P 500’s Retail ETF (XRT) finished the week down about 3.5%. Leading the declines were names like Ascena Retail Group, Foot Locker, American Eagle and Sears.

Ascena — the parent of clothing companies such as Ann Taylor and dressbarn — saw its shares plunge more than 30 percent earlier in the week, after it adjusted its second-half outlook to reflect worse-than-expected business conditions. Meanwhile, Foot Locker’s same-store sales fell short of expectations.

Off-price retailer TJX, which operates T.J. Maxx, Marshalls and HomeGoods stores, was expected to be an upbeat outlier for the week, but even its first-quarter comparable sales couldn’t match Street estimates. Gap reported a surprise rise in quarterly same-store sales, bucking the trend of dismal results in the U.S. retail industry, as the company benefited from the robust performance at its Old Navy brand.

Campbell Soup’s quarterly sales and profit missed analysts’ estimates, hurt by higher promotions and weak demand for its condensed soups, broths and V8 vegetable juices, and the company warned that its full-year sales could decline.

Deere & Co raised its full-year sales and profit forecast for the second time, as demand improves for its farm and construction equipment, particularly in South America, sending its shares to a record high of $122. The company said it expected fiscal 2017 industry sales of tractors and combined harvesters in South America to be at the high-end of its earlier forecast of about 15-20 percent rise.

While farmers in South America have been complaining about low prices, they have enjoyed big gains in corn and soybean output.

Brazil’s Supreme Court released explosive plea-bargain testimony today accusing President Michel Temer, along with former presidents Lula da Silva and Dilma Rousseff, of receiving millions in bribes. The testimony raises serious doubts about whether Temer, who replaced the impeached Rousseff last year, can maintain his grip on the presidency.

The testimony implicates both ruling and opposition parties and indicates that Temer, a conservative, accepted $4.6 million in bribes from JBS, which ranks as the world’s largest meat processor. It also alleges that Lula, who is already facing five corruption trials, received $50 million in bribes in offshore accounts from JBS, while Rousseff took $30 million in bribes.

Temer said he would not resign from the presidency. The Supreme Court released an audio tape of Temer, approving the payment of hush money to former lower house speaker Eduardo Cunha, who last year orchestrated Rousseff’s impeachment and was later convicted for corruption.

Many politicians fear that if Cunha should turn state’s witness, his testimony could implicate scores of congressmen and members of the executive branch.

About 37,000 AT&T workers, or less than 14 percent of the company’s total workforce, began a three-day strike after failing to reach an agreement with the No. 2 U.S. wireless carrier over new contracts. This is the first time that AT&T wireless workers are on strike, which could result in closed retail stores during the weekend.

The workers on strike are members of the CWA Communications Workers of America union. The workers are demanding wage increases that cover rising healthcare costs, job security against outsourcing, affordable healthcare and a fair scheduling policy.

Slightly over half of the workers on strike are part of the wireless segment and the rest wireline workers, including a small number of DirecTV technicians.

Fiat Chrysler plans to update software that it expects will resolve the concerns of U.S. regulators about excess emissions in 104,000 older diesels. The software update would begin rolling out once the Environmental Protection Agency and California Air Resources Board approved.

In January, the EPA and California accused Fiat Chrysler of illegally using undisclosed software to allow excess diesel emissions in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks in a notice of violation.

The Environmental Protection Agency and California Air Resources Board announced approval of a fix for about 84,000 older Volkswagen diesel vehicles that can emit excess emissions. Volkswagen agreed last year to offer to buy back up to 475,000 2.0-liter diesel vehicles that had been sold in the United States or offer fixes if regulators approved.

Friday’s announcement covers a fix for 84,000 2012-2014 Passat diesel vehicles with automatic transmissions. A fix for vehicles with manual transmissions has not yet been approved. In January, regulators approved a fix for 67,000 2015 model diesels, leaving around 325,000 older vehicles still awaiting approval for a fix.

The federal government has, in recent years, paid debt collectors close to $1 billion annually to help distressed borrowers climb out of default and scrounge up regular monthly payments. New government figures suggest much of that money may have been wasted.

Nearly half of defaulted student-loan borrowers who worked with debt collectors to return to good standing on their loans defaulted again within three years, according to an analysis by the Consumer Financial Protection Bureau. For their work, debt collectors receive up to $1,710 in payment from the Department of Education each time a borrower makes good on soured debt through a process known as rehabilitation.

They keep those funds even if borrowers subsequently default again. What constitutes rehabilitation? Nine months of on-time payments, even if the borrower only pays $5 a month. That means that in many cases, the government pays $38 to collect one dollar. The department has earmarked more than $4.2 billion for payments to its debt collectors since the start of the 2013 fiscal year.

Seven years into an economic recovery, nearly half of Americans didn’t have enough cash available to cover a $400 emergency. That’s according to the latest findings from the Federal Reserve’s annual economic well-being of U.S. households, which found 44% in 2016 said such an expense would have to be covered by borrowing or selling something.

That’s a similar percentage to what was found in past Fed surveys. Of the group that can’t pay in cash, 45% would use a credit card to pay off the expense over time, about a quarter would borrow from friends of family, another 27% just couldn’t pay the expense and smaller fractions would turn to selling items or using a payday loan.

We now know where all the money is hiding. Retirees who are usually expected to spend that hard-earned nest egg are instead cutting their spending and living frugally, according to a University of Michigan survey analyzed by software company United Income. The median retiree spends 8 percent less than they comfortably could afford; the result, retirees now hold assets totaling more than $25 trillion.

Spending money, besides being a boost for the economy, could help retirees be more active, if they physically get out of the house to do it. Meanwhile, younger Americans, whose incomes are falling behind those of previous generations, aren’t saving enough.

So, the moral of the story is get out and spend some money this weekend, you might feel younger.

Financial Review

C’est l’économie stupide

Sinclair Noe — April 21, 2017

Podcast: Play in new window | Download (Duration: 20:24 — 11.7MB)

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DOW – 30 = 20,547
SPX – 7 = 2348
NAS – 6 = 5910
RUT – 4 = 1379
10 Y – .01 = 2.24%
OIL – 1.17 = 49.54
GOLD + 2.20 = 1284.90

For the week, the Dow Industrials were down 3 days and up 2, but the 2 gainers were big. The S&P 500 managed to notch its first weekly gain in three. For the week, the Dow rose 0.5 percent, the S&P gained 0.8 percent and the Nasdaq advanced 1.8 percent, notching a record high along the way. Small caps in the Russell 2000 provided out-sized gains of 2.6% on the week.

Oil prices dropped more than 2 percent today, notching the biggest weekly decline in more than a month on mounting evidence that US production and inventory growth were offsetting OPEC’s attempts to reduce the global crude glut. WTI crude lost 6.7 percent for the week.

The U.S. Commodities Future Trading Commission showed total long positions in U.S. crude rose in the week to April 18 to their highest in more than a month at 355,077 contracts. But oil has sagged in recent days, much as it did in March. Many in the market still expect OPEC to renew its production cuts for another six months. Still, shipment data shows more oil transiting world oceans than when cuts were put in place.

According to AAA, 43 states have seen prices at the pump increase over the past week. The national average is $2.42 a gallon, which reflects an increase of 13 cents in the last month, and 30 cents (or around 14%) compared to last year. A bump in gas prices is typical around this time of year, as oil refineries switch over from their winter blend to the summer blend.

The United States currently has an oversupply of gas, and as the weather warms up, demand will likely rise in June, sapping up supply and pushing prices up. AAA expects the national average for gas to peak at around $2.70 a gallon in June. In 2016, summer gas prices peaked at an average of $2.38 a gallon.

Johnson says that a handful of states will even see gas prices over $3 a gallon this summer, especially on the West Coast. In fact, two states already hit that benchmark this week: Hawaii ($3.06) and California ($3.01). The cheapest gas in the nation can currently be found in South Carolina ($2.13).

Of the 95 companies in the S&P 500 that have reported earnings through Friday morning, about 75 percent have topped expectations, according to Thomson Reuters data, above the 71-percent average for the past four quarters. Overall, profits of S&P 500 companies are estimated to have risen 11.2 percent in the quarter, the most since 2011.

Markets were hesitant today, in advance of Sunday’s French elections; this is just the first round of elections, winnowing a field of 11 candidates down to 2, who will face off in 3 weeks. Still, a lot is at stake. We’ll dive into details in just a bit.

President Trump told the Associated Press he’ll unveil a tax-reform package next week and promised a “massive tax cut” for individuals and businesses. He said it would be released “Wednesday or shortly thereafter” but declined to give details. He said the cuts will be “bigger I believe than any tax cut ever.”

The Tax Policy Center in Washington says, “The plan would cut taxes at every income level, but high-income taxpayers would receive the biggest cuts, both in dollar terms and as a percentage of income.”

Treasury Secretary Steven Mnuchin reiterated the administration is planning to unveil its tax reform plan in the near future. He said the administration is “very close” to releasing a proposal. Mnuchin said corporate inversions will be part of an overall review of tax regulations. Inversions involve US firms that move their legal address abroad to cut their tax bills through mergers with foreign companies.

President Trump’s budget director Mick Mulvaney said the administration plans to include $200 billion for new infrastructure spending in its full fiscal year 2018 budget. In a moderated discussion at the Institute of International Finance conference, Mulvaney said this is all the money needed to fund $1 trillion in projects, if leveraged properly. Mulvaney said there will not be any specific votes on infrastructure spending until the fall.

The White House ordered federal agencies to begin preparations for a potential partial government shutdown; it shouldn’t come to that but they need to be prepared. The White House said it wants to see money for Trump’s border wall included in the spending bill Congress must pass next week.

Democrats are opposed to the wall and consider including it in the budget bill to be something of a poison pill. The Senate needs 60 votes to pass the budget. Look for a possible short-term extension while they work it out. The push to reach an agreement on spending is complicated by White House efforts to try again for a House vote on replacing Obamacare next week.

If ongoing congressional budget battles force a government shutdown next week, home-buyers and sellers could be subject to more headaches than usual before their deals close.  That’s because buyers looking for mortgage approval could hit paperwork roadblocks if the shutdown furloughs workers at the IRS or Social Security Administration.

That’s what happened in October 2013, the last time budget gridlock forced a 16-day shutdown that sent millions of government workers on furlough and gummed up the works of the U.S. housing market.

The National Association of Realtors says existing-home sales ran at a seasonally adjusted annual rate of 5.71 million, a 4.4% monthly increase. That was the strongest selling pace since February 2007 and was 5.9% higher than a year ago.

Tight inventory is still the biggest factor in the marketplace: supply was 6.6% lower compared to a year ago. That nudged the national median sales price to $236,400 – a 6.8% gain compared to a year ago. March’s price increase marks the 61^st consecutive month of year-over-year gains.

Unemployment rates were lower in March in 17 states and stable in 33 states.  Colorado had the lowest unemployment rate in March, 2.6 percent. New Mexico, at 6.7%, had the highest state unemployment rate. Arizona’s seasonally adjusted unemployment rate decreased from 5.1% in February to 5.0% in March.

The U.S. seasonally adjusted unemployment rate decreased from 4.7% in February to 4.5% in March. A year ago, the Arizona seasonally adjusted rate was 5.4% and the U.S. rate was 5.0%. The Private Sector gained 11,200 jobs; government cut 2,400 jobs, for a net gain of 8,800. The sector with the strongest growth was Leisure and hospitality.

Federal Reserve Vice Chairman Stanley Fischer isn’t worried about the economy. In an interview today, Fischer said weak growth in the US economy in the first quarter will likely be temporary and interest-rate hikes should be able to proceed as planned. The Fed has penciled in two more rate hikes this year and Fischer said this remains his forecast, depending on data, of course.

In the past few years, the economy has shown weakness in the first quarter, followed by stronger growth in the second and third quarters. First quarter growth was probably running at 1%. The government will release an advance estimate of first-quarter GDP April 28. Economists expect a rebound to a 2.7% rate in the second quarter.

The United States will not make an exception for American companies, including Exxon Mobil, seeking to drill in areas prohibited by U.S. sanctions on Russia. The United States and European Union imposed economic sanctions on Russia over its annexation of the Crimea region in 2014 and its role in the conflict in eastern Ukraine.

The sanctions forced Exxon to wind down drilling in Russia’s Arctic in 2014. Exxon had asked for and received in 2015 and 2016 waivers to operate a joint venture with Russian oil producer Rosneft in Russia. European Union sanctions do not keep European oil companies from operating in Russia, a point of annoyance for Exxon.

In recent months, Exxon applied for a Treasury Department waiver to drill with Rosneft – and today the waiver request was denied.

A federal judge in Detroit sentenced Volkswagen to three years’ probation for the German automaker’s diesel emissions scandal as part of a $4.3 billion settlement announced in January. The plea agreement called for “organization probation” in which the company would be overseen by an independent monitor.

General Electric reported quarterly sales and adjusted earnings results that beat analysts’ estimates, but its shares fell on concerns about some of its industrial businesses and its $1.6 billion in negative cash outflow. Adjusted earnings of 21 cents a share were unchanged from a year ago and beat analyst estimates of 17 cents. Revenue fell 1 percent to $27.66 billion. GE down 2.4%.

Subway Restaurants closed 359 U.S. locations in 2016, the first time that Subway had a net reduction. The store count dropped 1.3 percent to 26,744, but Subway remains the nation’s most ubiquitous eatery. Subway is coping with sub-par sales in the U.S., made worse by the emergence of newer fast-casual rivals and the industry’s heavy reliance on discounts and promotions.

Subway also has lost some of its luster as a healthier-food option. Sales fell 1.7 percent last year to about $11.3 billion. Subway is still growing internationally, though. Last year, sales outside the U.S. rose 3.7 percent to $5.8 billion as it continued to open locations.

Financial Review

Go Figure

Sinclair Noe — February 8, 2017

Podcast: Play in new window | Download (Duration: 12:09 — 7.0MB)

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DOW – 35 = 20,054
SPX + 1 = 2294
NAS + 8 = 5682
RUT – 2 = 1358
10 Y – .04 = 2.35%
OIL + .19 = 52.97
GOLD + 8.10 = 1242.50

Another record high for the Nasdaq Composite, its 12th all-time close of 2017.

The American Petroleum Institute reported crude supplies rose by 14.2 million barrels last week, undermining OPEC’s efforts to re-balance global markets. The Energy Information Administration said that the U.S. will pump the most crude next year since 1970, as OPEC cuts lift prices and benefit domestic producers.

And in its weekly report this morning, the EIA reported a larger-than-expected increase in crude-oil supplies—their fifth weekly rise in a row and the second-biggest on record, based on EIA data going back to 1982.

Crude inventories climbed by 13.8 million barrels in domestic crude-oil supplies for the week ended Feb. 3. Weekly crude stockpiles haven’t climbed by this much since the week ended Oct. 28. Crude oil prices reversed an earlier loss and eked out a gain on the day. Go figure. Best guess is that the report also showed gasoline supplies fell by 900,000 barrels. Sorry, but that’s about the best excuse I can come up with.

Intel will invest $7 billion to build a new chip factory in Arizona. Brian Krzanich (pronounced Krah-ZAN-nitch – you're welcome) the CEO of Intel says that tax cuts and deregulatory policies pushed by President Trump prompted the company to move forward with its plans to complete the Fab 42 plant.

The completion of Fab 42 in 3 to 4 years will directly create approximately 3,000 high-tech, high-wage Intel jobs for process engineers, equipment technicians, and facilities-support engineers and technicians who will work at the site. Combined with the indirect impact on businesses that will help support the factory’s operations, Fab 42 is expected to create more than 10,000 total long-term jobs in Arizona.

The 7-nanometer semiconductor manufacturing process targeted for Fab 42 will be the most advanced semiconductor process technology used in the world.

Japanese display maker Sharp Corp may start building a $7 billion plant in the United States in the first half of 2017, taking the lead on a project initially outlined by its Taiwanese parent Foxconn. Japanese Prime Minister Shinzo Abe is scheduled to meet President Trump in Florida this weekend. Abe will reportedly unveil a package of investments to create as many as 700,000 US jobs. The investment will be by a Japanese consortium that will also include manufacturing equipment makers.

Britain’s House of Commons gave its final approval Wednesday to a bill authorizing the government to start exit talks with the European Union, despite fears by opposition lawmakers that the U.K. is setting out on the rocky path to Brexit with a sketchy road map. The bill now goes to the House of Lords, which has the power to delay — but not to derail — the legislation; it should become law within weeks.

Volkswagen has launched a U.S. subsidiary designed to oversee $2 billion in investments to promote zero-emission vehicles, a commitment the German auto giant made in the wake of Dieselgate. The Electrify America unit will open more than 500 EV charging stations as it works toward building out a national network. VW will also launch a “Green City” initiative in a yet-to-be-identified California city to pilot future concepts.

According to a court filing, Takata will plead guilty on Feb. 27 to a single felony count of wire fraud to resolve a DOJ investigation into ruptures of its air bag inflators linked to at least 16 deaths worldwide. Last month, the auto parts firm agreed to the guilty plea as part of a $1 billion settlement in the world’s largest-ever recall.

Time Warner reported higher-than-expected fourth-quarter results, largely due to box office hits such as the “Harry Potter” spinoff “Fantastic Beasts.” Time Warner reported an 11.5% rise in quarterly revenue and said the planned $84 billion merger with AT&T remained on track to close later this year.

Swiss pesticides and seeds group Syngenta pushed back the expected closure of its agreed $43 billion takeover by ChemChina to the second quarter of 2017, but said it was making progress in winning regulatory approval for the deal.

Humana earned an adjusted $2.09 per share for its latest quarter, while revenue was slightly below projections. Humana said that it added members in its Medicare Advantage business, and that it would give an update on its transaction to be bought by Aetna by February 16. That deal was blocked in a court ruling last month.

Allergan earned an adjusted $3.90 per share for its latest quarter, beating estimates of $3.76 a share. Its revenue also came in above forecasts on increased sales of Botox and other therapeutic treatments.

Shares of Microchip Technology are up, continuing last night’s gains, after the chip maker yesterday afternoon beat fiscal Q3 expectations and topped consensus as well.

Shares of Panera Bread surged to a record high and the biggest one-day move in almost two years after the company gave an upbeat forecast and said technology investments at its restaurants were paying off.

Whole Foods Market reported revenues and comparable sales that fell short of Wall Street’s expectations. Whole Foods also lowered full-year sales and earnings guidance in wake of the weak results.

Alaska Air, the fifth-largest U.S. carrier, beat estimates by 16 cents a share, with adjusted quarterly profit of $1.56 per share. Revenue beat forecasts and the company also increased its quarterly dividend.

Canada’s government will provide $282 million in support for Bombardier to help fund two jet programs, including the C Series, the single-aisle plane that competes with Boeing and Airbus Group SE products. After landmark sales of the jetliner to Air Canada and Delta Air Lines in 2016, the company is now seeking new orders while also targeting the first delivery of the Global 7000, its largest business aircraft.

Bank of America is opening robo branches. The bank has opened three automated branches over the past month and has plans to roll out more over the next year. Customers can use ATMs and have video conferences with employees at other offices. BofA is set to open 50 to 60 new branches over the next year, but will also be closing some in certain markets, so they will not represent a net increase.

At its height, back in 2000, the US cash equities trading desk at Goldman Sachs’ New York headquarters employed 600 traders, buying and selling stock on the orders of the investment bank’s large clients. Today there are just two equity traders left. Automated trading programs have taken over the rest of the work, supported by 200 computer engineers.

The experience of its New York traders is just one early example of a transformation of Goldman Sachs, and increasingly other Wall Street firms, that began with the rise in computerized trading, but has accelerated over the past five years, moving into more fields of finance that humans once dominated.  Some areas of trading, like currencies and even parts of business lines like investment banking are moving in the same automated direction that equities have already traveled.

Today, nearly 45 percent of trading is done electronically, per Coalition, a UK firm that tracks the industry. Complex trading algorithms, some with machine-learning capabilities, first replaced trades where the price of what’s being sold was easy to determine on the market, including the stocks traded by Goldman’s old 600.

Now areas of trading like currencies and futures, which are not traded on a stock exchange like the New York Stock Exchange, are coming in for more automation as well. To execute these trades, algorithms are being designed to emulate as closely as possible what a human trader would do.

Goldman Sachs has already begun to automate currency trading, and has found consistently that four traders can be replaced by one computer engineer. Some 9,000 people, about one-third of Goldman’s staff, are computer engineers.

Goldman’s new consumer lending platform, Marcus, aimed at consolidation of credit card balances, is entirely run by software, with no human intervention. Next, will be the automation of investment banking tasks, work that traditionally has been focused on human skills like salesmanship and building relationships.

Though those “rainmakers” won’t be replaced entirely, Goldman has already mapped 146 distinct steps taken in any initial public offering of stock, and many can – and will – be automated. Reducing the number of investment bankers would be a great cost savings for the firm. Investment bankers working on corporate mergers and acquisitions at large banks like Goldman make on average $700,000 a year, per Coalition, and in a good year they can earn far more.

Financial Review

Farewell, Goodbye

Sinclair Noe — January 10, 2017

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DOW – 31 = 19,885
SPX unchanged = 2268
NAS + 20 = 5551
RUT + 13 = 1370
10 Y + .01 = 2.38%
OIL – 1.16 = 50.80
GOLD + 6.50 = 1188.30

World stock markets nudged back toward recent multi-month highs, aided by a rally in commodity prices. The US dollar index slumped to a low of 101.51 in overnight action, breaking slightly below the lows of mid-December. The post-Brexit British pound moved lower; it’s the gift that keeps on giving, as the FTSE 100 closed in record territory for the 9^th straight session.

The Dow Industrials flirted with 20,000 again but it was nothing more than coy flirtation – moving within 42 points then slipping away. The S&P 500 was flat; not a fraction – no change at all. The Nasdaq posted its third straight record high close.

The home purchase sentiment index compiled by mortgage finance provider Fannie Mae fell in December, its fifth straight monthly decline. Tight inventories, rising mortgage rates and higher home prices are taking a toll on Americans’ attitudes toward home ownership. The overall index dropped 0.5% to 80.7 in December; down 2.5% from one year ago.

The National Federation of Independent Business said its optimism index jumped 7.4 points to 105.8, the highest level in 12 years. Small business owners overwhelmingly expect business conditions to improve under the new administration. Most of the December improvement came from the “expectations” components of the index. Owners say now is a good time to expand. Job creation plans increased 1 point, to a 9-year high, in December, but actual hiring was basically flat during the month.

Consumer credit expanded at a seasonally adjusted annual rate of 7.9%, or $24.6 billion, in November. The Federal Reserve reported that revolving credit, such as credit cards, jumped 13.5% while nonrevolving credit, such as car and student loans, rose 5.9%.

The Labor Department published its Job Openings and Labor Turnover Survey, also known as JOLTS. There were 5.5 million openings on the last day of November. That was 1.3% higher than October. The number of hires rose 1.1% to 5.2 million. The number of people who quit jobs voluntarily also rose, to 3.1 million. That was the second-highest level since before the recession.

Quits are tracked as a measure of worker confidence in the ability to land another job. The JOLTS report shows employers are slow to fire but also slow to hire. There were some signs of tightening in the labor market; the ratio of the unemployed per job opening dipped to 1.3, from 1.4 in each of the prior three months.

Meanwhile, confirmation hearings are underway for President-elect Trump’s cabinet nominees. Tomorrow, Trump holds his first news conference since before the election, but he was still making news today, calling for the immediate repeal of Obamacare.

Trump, who seemed unclear on the timing of already scheduled votes in Congress this week, demanded a repeal vote “probably sometime next week” and adding, “the replace will be very quickly or simultaneously, very shortly thereafter.” The Senate is planning a vote related to repeal on Thursday morning and the House could vote on Friday; the problem is the replacement, which doesn’t yet exist.

Later tonight, President Obama will give his farewell address in Chicago at 7PM Arizona time (9 ET). This is traditional for most two-term presidents. Most farewell addresses are forgettable, with 2 notable exceptions: the first presidential farewell delivered by George Washington, which was framed with warnings to the young nation about the dangers of sectionalism, overzealous partisanship, and of permanent foreign alliances; and the second noteworthy farewell address was from President Eisenhower, where he warned that the new “conjunction of an immense military establishment and a large arms industry” — which he dubbed “the military-industrial complex” — could pose grave dangers to American liberties and US democracy.

Arizona Governor Doug Ducey delivered the State of the State address yesterday. Ducey said he was ready to make “a commitment our educators can take to the bank.” That includes promises of increased state aid and higher teacher pay. And he had special programs designed to get teachers into schools in areas of high poverty. But Arizonans must wait until Friday when the governor releases his budget proposal to find out what that means in dollars and cents.

Apple has submitted a proposal to expand its manufacturing capabilities at a site in Mesa, Arizona where it already produces certain components for its consumer products. The notice shows Apple seeking to expand its production capabilities at the site in Mesa to be able to produce finished products and utilize foreign status materials/components — including a laundry list of core electronics components, such as printed circuit board assemblies, lithium polymer batteries and monitors.

If it’s approved, however, the Arizona facility would mark an unusual instance of a U.S. tech company manufacturing and assembling a finished product domestically, where labor costs are higher.

Yahoo will rename itself Altaba Inc and Chief Executive Officer Marissa Mayer will step down from the board after the closing of its deal with Verizon. Yahoo has a deal to sell its core internet business, which includes its digital advertising, email and media assets, to Verizon for $4.8 billion.

The terms of that deal could be amended – or the transaction may even be called off – after Yahoo last year disclosed two separate data breaches; one involving some 500 million customer accounts and the second involving over a billion. I wonder how many high level corporate board meetings were required to come up with the new name – Altaba – and I’m not sure how to pronounce it, but it should throw the hackers off the trail for a while.

Wall Street’s largest back-office processing service, Depository Trust & Clearing Corp, is partnering with IBM to upgrade how payments and record-keeping for credit-default swaps are handled by putting the system on a blockchain by early next year. If you’re wondering what blockchain is, it is basically a digital ledger that can publish a continuously growing list of ordered records through peer-to-peer transactions, without the need for a third party.

This is the technology behind Bitcoin; and while Bitcoin might be a bit dodgy, many of the world’s biggest banks and corporations are trying to harness the technology to make the likes of transacting cross-border payments, issuing debt and recording health data more efficient – or in this case record keeping for derivatives. And if it works here, look for it to eventually spread to the Options Exchanges and stock exchanges, etc.

Bank of America is being accused of stiffing the FDIC, the government agency that insures people’s deposits against a bank failure. The FDIC filed a lawsuit in federal court demanding that Bank of America pay $542 million it owes to the regulator’s deposit insurance fund.

The lawsuit claims Bank of America underreported a key risk metric by tens of billions of dollars during the final three quarters of 2013 and all of 2014. The FDIC said that allowed BofA to appear less risky than it really was – and avoid paying the FDIC an average of $77 million each quarter into the agency’s deposit insurance fund.

Volkswagen is considering a $4.3 billion settlement to resolve civil and criminal allegations stemming from its emissions-cheating scandal. The agreement, which has yet to be finalized, would lead to a financial expense that exceeds current provisions. It also includes a guilty plea to some criminal charges, strengthening compliance systems and installing an independent monitor for three years

Alibaba is leading a $2.6 billion bid to privatize Intime Retail Group, which operates 29 department stores and 17 shopping malls in China, giving the e-commerce giant a firmer foothold in bricks and mortar.

Jack Ma, executive chairman of Alibaba, met with Donald Trump to pitch the U.S. president-elect on how the company can create one million small business jobs in America.

Valeant is selling assets. The embattled drug-maker announced plans to sell three skincare brands to L’Oreal for $1.3 billion.

American Apparel has a new owner. The Canadian apparel maker Gildan Activewear won the auction for the failed retailer American Apparel with its bid of about $88 million.

Add another retailer to the casualty list – The Limited has shut down all 250 of its stores and laid off 4,000 workers. Sun Capital, the private-equity firm that owns The Limited, attributed the decision in part to falling foot traffic at shopping malls.

They issued a statement saying: “We’re sad to say that all The Limited stores nationwide have officially closed their doors. But this isn’t goodbye. The styles you love are still available online—we’re just a quick click away 24 hours a day.” I’m not sure, but certainly sounds like goodbye.