Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz for the day will be.
The Stock Markets were closed Monday; on Friday, the Dow Jones industrial average climbed 190.86 points, or 1.1%, to close at 17,511.57. The Standard & Poor's 500 index rose 26.75 points, or 1.3%, to finish at 2,019.42. The NASDAQ composite rose 63.56 points, or 1.4%, to 4,634.38.
Benchmark U.S. crude jumped $2.44 on Friday to settle at $48.69 a barrel in New York trading. Brent crude, a benchmark for international oils used by many U.S. refineries, added 31 cents to $50.17 in London. Wholesale gasoline rose 6 cents to close at $1.359 a gallon. Heating oil rose 4.3 cents to close at $1.666 a gallon. Natural gas fell 3.1 cents to close at $3.127 per 1,000 cubic feet.
FIREHOUSE SUBS’ FIRST TV AD GOES BACK TO BRAND’S ROOTS
Firehouse Subs debuted its first national television advertising campaign earlier this year. Featuring the brand’s founding brothers, Robin and Chris Sorensen, the campaign seeks to highlight Firehouse Subs’ authentic roots. “We used the founders because they’re truly firefighters—they’re from a family of first-responders—so that part of the brand’s story is very real,” says Kristen Majdanics, senior director of brand marketing for Firehouse Subs. “And of course it’s important to showcase the quality of our food and marry those two things together to show who we are and what we represent.” Firehouse Subs began testing television ads in small markets to see how consumers perceived its founders. After receiving positive feedback, the company began filming the new ad at the end of November and aired its first spot, “Quality & Quantity,” on January 5. The brand has 850 national locations and ambitious growth goals for 2015, Majdanics says, making the timing perfect to expand marketing efforts to entice both new customers and new franchisees.
NATURAL GROCERS OPENS IN TUCSON WITH 18 MORE STORES PLANNED FOR 2015
Tucson, Ariz. -- Natural Grocers by Vitamin Cottage, will open its first store in Tucson, its fourth in Arizona, on Jan. 20. The family-run company was built on the premise that "consumers should have access to affordable, high-quality foods and dietary supplements, along with nutrition knowledge, to help support their own health." "We are excited to become the newest 'neighbor' in a community such as Tucson, which is very food- and health-oriented," said Kemper Isely, co-president of Natural Grocers and a member of the founding family. Currently, Natural Grocers has 91 stores in 15 states. It expects to open 18 stores in fiscal year 2015.
SCIENTISTS TARGET 3-D-PRINTED BODY PARTS
TOKYO - Japanese scientists say they are on their way to being able to create custom-made skin, bone and joints using a 3-D printer. Several groups of researchers around the world have developed small masses of tissue for implants, but now they are looking to take the next step and make them functional. Tsuyoshi Takato, a professor at the University of Tokyo Hospital, said his team had been working to create "a next-generation bio 3-D printer," which would build up thin layers of biomaterials to form custom-made parts. His team combines stem cells -- the proto-cells that are able to develop into any body part -- and proteins that trigger growth, as well as synthetic substance similar to human collagen. Using a 3-D printer, they are working on "mimicking the structure of organs" -- such as the hard surface and spongy inside for bones, Takato said. In just a few hours, the printer crafts an implant using data from a Computer Tomography (CT) scan. These implants can fit neatly into place in the body, and can quickly become assimilated by real tissue and other organs in the patient, the plastic surgeon said. The technology could also offer hope for children born with bone or cartilage problems, for whom regular synthetic implants are no good because of the rate of their body's growth.
WARMER DECEMBER HITS US INDUSTRIAL PRODUCTION
WASHINGTON - An unusually warm December slowed U.S. energy output, pushing overall industrial production lower, the Federal Reserve reported Friday. Industrial output fell 0.1% month-over-month in December, after a strong 1.3% gain in November. The December decline reflected a steep 7.3% drop in the output of utilities, "as warmer-than-usual temperatures reduced demand for heating," the central bank said in its monthly report. Excluding utilities, total industrial production rose 0.7% in December. Mining production rose 2.2%, largely reflecting increases in oil and gas extraction. Mining output had fallen 0.3 percent in the prior month. Manufacturing rose for the fourth consecutive month, by 0.3%. For the fourth quarter, U.S. industrial production climbed at an annual rate of 5.6% in widespread gains. Year-over-year, industrial output was up a solid 4.9% in December, led by an 11.1% jump in mining. In the final month of the year, the capacity utilization rate slipped 0.3 percentage point to 79.7%, below the long-run average of 80.1%.
KANTAR: RETAIL SALES EXPECTED TO RISE 4.5% IN 2015
New York - The outlook for the retail industry looks bright, with lower prices at the pump and decreasing unemployment boding well for consumer spending. Retail sales are expected to rise 4.5% in 2015, which is about one percentage point stronger than 2014 growth, according to a report by Kantar Retail, whose analysis excludes automobile dealers, and gas and food service. Growth will improve in most channels in 2015, the study notes, but remain skewed toward online gains. Online sales, which account for approximately 10% of total retail sales, are expected to grow 15% this year, same as in 2014, while sales at physical stores are expected to rise 3.6%. The retail landscape will remain uneven and fragmented with most of the gains driven by younger people. By channel, Kantar sees another year of healthy growth for drug stores as healthcare reform rollout sustains spending from the newly insured. While online competition will weigh on all specialty stores, the apparel channel will be bolstered by job and income gains. Department stores will lag. The home goods market hinges partly on subsiding price deflation that dampened 2014 growth, according to Kantar.
WALGREENS LEGAL HEAD LEAVING OR EXEC ROLE AT HERTZ
Deerfield, Ill.- Thomas Sabatino Jr., executive VP, global chief legal and administrative officer, Walgreens Boots Alliance, will be leaving the company to join Hertz Global Holdings effective Feb.9. Sabatino will join Hertz Global Holdings as senior executive VP, chief administrative officer and general counsel. Sabatino will remain in his current role with Walgreens Boots Alliance through the end of January to ensure a smooth transition of his current responsibilities. The company expects to announce his successor at that time. Joining Walgreens as executive VP, general counsel and corporate secretary in 2011, and serving as chief administrative officer since 2014, Sabatino led and oversaw the company’s merger and integration efforts with Alliance Boots.
PROFITS DOWN: HIGH DOLLAR DENTS US COMPANY EARNINGS
WASHINGTON (AP) -- The rising U.S. dollar is denting the earnings of U.S. companies that operate overseas. The damage started showing up in results for the July-September period, and the picture will likely get uglier as companies report earnings for the final three months of 2014. A prolonged drop in profits risks rattling investors and pressuring stocks.
FUNDING BOOM SHOWS POWER OF TECH STARTUPS
SAN FRANCISCO (AP) -- Venture capitalists poured a whopping $48.3 billion into U.S. startup companies last year, investing at levels that haven't been seen since the heady days before the dot-com bubble burst in 2001. Software and biotechnology companies were the leading recipients of venture funding in 2014, which rose more than 60% from the previous year, according to a new report issued Friday. Experts say the surge comes as tech startups are performing well in public stock offerings, and shows that investors recognize the power of new technology to disrupt and replace old industries. But it also underscores a nagging concern that investors may be sinking money into some companies at inflated values.
WHAT HAPPENED TO THE SWISS FRANC AND WHY IT MATTERS
NEW YORK (AP) -- One of the world's safest investments — the Swiss franc — has swung wildly this week after the central bank in Switzerland announced it would scrap its policy of limited the rise of the currency. It may seem like an arcane move, but it's not. The Swiss National Bank's surprise decision on Thursday caused the franc to surge against the euro and dollar, sending shockwaves through the global financial system. Holders of Swiss francs profited handsomely, but many investors and brokerage firms were pounded with losses. Two brokerage firms in London and New Zealand's have announced huge losses and will have to close. A New York-based currency broker said clients suffered significant losses, and needed an emergency loan to stay in business.
COMPANY WITH CHEMICAL SPILL TIES CITED 8 TIMES
NITRO, W.Va. (AP) -- A few towns over from the chemical plant that leaked a coal-cleaning mixture into the drinking water of 300,000 West Virginians last year, a new company run by some of the same people is being cited for similar environmental violations. State regulators have written up the new firm, Lexycon LLC, eight times since September for pouring chemicals without a permit, lacking proper "last-resort" walls to contain spills, and hosting tanker-trailers full of unknown chemicals, among other infractions, according to records reviewed by The Associated Press. Some of the infractions at Lexycon still haven't been addressed despite three site-wide inspections and dozens of smaller visits by regulators from the West Virginia Department of Environmental Protection since May, state reports show.
WET SEAL FILES FOR BANKRUPTCY IN EFFORE TO STAY AFLOAT
NEW YORK (AP) -- The Wet Seal Inc. has filed for Chapter 11 bankruptcy protection in an effort to keep its remaining teen clothing stores open. The announcement Friday comes a little over a week after the chain said that it was closing 338 stores, or about two-thirds of its total. Fellow teen clothing retailers Delia's Inc. and Deb Stores filed for Chapter 11 bankruptcy in December, further evidence of trouble in a business being hurt by tough competition and changing tastes among teenagers.
US COMSUMER PRICES DROP 0.4% IN DECEMBER
WASHINGTON (AP) -- U.S. consumer prices fell in December by the largest amount in six years, reflecting another big monthly decline in gas prices and providing further evidence of falling inflation pressures. The Labor Department said Friday that its consumer price index dropped 0.4% last month, the biggest one-month drop since December 2008. It was also the second straight monthly decline in prices with both months reflecting big decreases in gas prices. Core inflation, which excludes volatile food and energy, showed no increase in December, only the second time since 2010 that core prices have not risen.
GOLDMAN SACHS 4Q EARNINGS FALL 10%
Goldman Sachs posted a 10% drop in fourth-quarter earnings Friday as trading activity declined. The Wall Street investment bank's fixed income, currency and commodities division saw a 29% revenue slump during the quarter, from $1.72 billion to $1.22 billion. Goldman follows other major U.S. banks this week in reporting a noticeable slowdown in trading over the past three months.
US PROBES JEEP CHEROKEE FIRE, NISSAN AIR BAG TROUBLE
U.S. auto safety regulators are investigating engine compartment smoke or fire complaints in two Jeep Cherokees, and air bags that didn't inflate properly in two Nissan Rogues. The National Highway Traffic Safety Administration says in documents posted on its website Friday that the Cherokee probe covers 50,000 of the SUVs from the 2015 model year.
GROWERS STRUGGLE WITH GLUT OF LEGAL POT IN WASHINGTON
SEATTLE (AP) -- Washington's legal marijuana market opened last summer to a dearth of weed. Some stores periodically closed because they didn't have pot to sell. Prices were through the roof. Six months later, the equation has flipped, bringing serious growing pains to the new industry. A big harvest of sun-grown marijuana from eastern Washington last fall flooded the market. Prices are starting to come down in the state's licensed pot shops, but due to the glut, growers are — surprisingly — struggling to sell their marijuana. Some are already worried about going belly-up, finding it tougher than expected to make a living in legal weed.
SOUTHWEST HIT WITH RECORD $1.6 MILLION FOR STANDING ON TARMAC
Dallas-based Southwest Airlines (NYSE: LUV) is being fined a record $1.6 million for forcing storm-stranded passengers in Chicago to wait on planes for more than three hours on the airport tarmac. The fine is the largest civil penalty levied against an airline for violating the U.S. Department of Transportation's tarmac delay rules. Three hours is the regulatory limit for keeping passengers on board after landing. A year ago, there were 16 Southwest flights into Chicago's Midway International Airport that exceeded the three-hour limit, the DOT said Thursday. A winter storm that dumped a foot of snow on the Chicago area contributed to the delays, but the agency said Southwest also experienced malfunctions of its crew scheduling system and a shortage of ramp crews to clear aircraft from its 29 gates at Midway.
ICSC SURVEY: THIS YEAR, COMMERCIAL LENDERS WILL DEVELOP A TASTE FOR RISK
Commercial-mortgage lending is expected to increase in 2015, as lenders’ appetites to place new loans remain strong and borrowers’ appetites to borrow increase, according to a Mortgage Bankers Association survey of 60 commercial-mortgage origination firms. All of the firms surveyed said they expect originations to increase this year, with 68 percent saying they expect an increase of 5 percent or more. Almost three-quarters say they expect their own firm’s originations to increase by 5 percent or more. “Commercial-mortgage lenders anticipate another competitive year in 2015,” said Jamie Woodwell, MBA’s vice president for commercial real estate research. “Lenders’ appetites for loans remain very strong, and with the 10-year loans made during 2005, 2006 and 2007 maturing, lenders also anticipate growing demand from borrowers.” Loan risk is also expected to grow. Most respondents (73 percent) characterized the loans made in 2014 as “medium” risk. This year more respondents expect loans to be “somewhat high” risk (38 percent, versus 9 percent in 2014). Lenders were surveyed on a scale of very low, somewhat low, medium, somewhat high and high.