US economy contracts in Q1; dollar hurts corporate profits

29 May 2015 | Author: | No comments yet »

Another first-quarter shocker: U.S. GDP falls 0.7%.

WASHINGTON (MarketWatch) — The economy contracted in the first quarter for the second straight year, a disappointing start that could foil the chance of the U.S. reaching 3% growth in 2015 for the first time in a decade.Maureen Fallt, who works in talent management for Portland General Electric, talks to a student during a high school career fair in March at the Oregon Convention Center.Analysts generally foresee the economy, as measured by the gross domestic product, growing at an annual rate of 2 percent to 2.5 percent in the April-June quarter, with further strengthening later in the year. That, of course, doesn’t mean the literal buildings, which is a good thing because buildings are becoming less important for the U.S. economy while knowledge is becoming increasingly important.

About 100 employers participated in the expo. (Kristyna Wentz-Graff/The Oregonian) The government’s revision for last quarter was weaker than its initial estimate of a 0.2 percent growth rate. And cutbacks in oil drilling, a result of low energy prices, could depress spending in the energy industry. “While the evidence of a second-quarter rebound hasn’t been overwhelming, we still think that the outlook for the economy is very encouraging,” Paul Ashworth, chief U.S. economist at Capital Economics, wrote in a research note. Consumer spending, which drives about 70 percent of economic activity, slowed to annual growth of just 1.8 percent for the quarter, slightly below the government’s first estimate. The MarketWatch survey estimates GDP will increase 3.2% in second quarter, though a new tracking tool created by the Atlanta Federal Reserve puts the gain at just under 1% with a month to go.

One of the biggest hits to the economy last quarter came from cuts in drilling activity by energy companies — fallout from the sharp drop in oil prices over the past year. A larger, wealthier population consumes more goods and services, which in turn, requires more capacity to produce goods and services—and more capital to produce those goods and services. In the opening months of 2015, exports sank 7.6% while the increase in imports was raised to 5.6% from a preliminary 1.8%, revised government data show. In 2014, investment in equipment was 4.7 times the 1980 level (twice the rate of GDP growth), and investment in intellectual property was 7.8 times the 1980 level (three times the rate of GDP growth).

She said several economic reports next week including consumer spending, the trade deficit and auto sales for May should provide important clues on the economy’s momentum. Two trends seem especially salient: more services with (relatively) fewer goods, and more knowledge and health care with (relatively) fewer products of traditional manufacturing.

More workers than ever can work out of their homes—and companies are increasingly adopting open floor plans that promote collaboration and require less space per employee. Despite a significant housing boom and crash, the long-run demand for residential buildings is set to continue growing along with the population, but the long-term outlook for nonresidential structures doesn’t look as positive. * In discussing economic growth, investment refers to putting in place additional capacity for production—in the form of buildings and machinery. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business.

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UPDATE 1-Western Refining to buy rest of Northern Tier

20 Jan 2016 | Author: | No comments yet »

JPMorgan Chase & Co. Upgrades Northern Tier Energy LP (NTI) to “Neutral”.

Under the deal, Northern Tier unit holders would receive $15 a unit in cash and 0.2986 Western Refining share for each common unit held, or roughly $26.21 a unit based on Monday’s close. EL PASO, Texas and TEMPE, Ariz., Dec. 21, 2015 (GLOBE NEWSWIRE) — Western Refining, Inc. (NYSE:WNR) and Northern Tier Energy LP (NYSE:NTI) today jointly announced that they have entered into a merger agreement whereby Western will acquire all of NTI’s outstanding common units not already owned by Western. Northern Tier Chief Executive Dave Lamp in prepared remarks Monday said that the MLP model “has not been rewarded by the equity market, as evidenced by the historical disconnect between NTI’s high yield and low unit price.” “With a simplified corporate structure and diverse geographic base, the new Western will be well positioned to unlock additional value for shareholders,” Mr. As an alternative to the cash and stock consideration, each NTI unitholder may elect to receive, per NTI unit, either $26.06 in cash or 0.7036 of a share of WNR.

Assuming completion of the proposed transaction, NTI will become a wholly-owned subsidiary of WNR and NTI common units will cease to be publicly traded. Jeff Stevens, President and CEO of WNR said, “The merger of Western and NTI will result in the combined entity owning three of the most profitable independent refineries on a gross margin per barrel basis, with direct pipeline access to advantaged crude oil combined with an integrated retail and wholesale distribution network. The terms of the merger agreement were approved by the WNR Board of Directors and the Conflicts Committee of the Board of Directors of NTI’s general partner, which negotiated the terms on behalf of NTI. Four investment analysts have rated the stock with a hold rating, five have assigned a buy rating and one has issued a strong buy rating to the stock.

The call and slide presentation can be accessed on the Investor Relations section of Western’s website, www.wnr.com, and on the Investor Relations section of Northern Tier’s website at www.northerntier.com. The Company has refining, retail and logistics operations that serve the Petroleum Administration for Defense District II (PADD II) region of the United States. Goldman Sachs & Co. acted as financial advisor to Western, and Vinson & Elkins, Davis Polk & Wardwell and Richards Layton & Finger acted as legal counsel to Western. This press release includes “forward-looking statements” by Western (which are protected as forward-looking statements under the Private Securities Litigation Reform Act of 1995) and by NTI.

The Company’s retail segment operated 165 convenience stores under the SuperAmerica brand and also supported 89 franchised convenience stores, which are also operated under the SuperAmerica brand. These statements are subject to the risk that the merger is not consummated at all, including due to the inability of Western or NTI to obtain all approvals necessary or the failure of other closing conditions, as well as to the general risks inherent in Western’s and NTI’s businesses and the merged company’s ability to compete in a highly competitive industry.

If you are reading this article on another website, that means this article was illegally copied and re-published to this website in violation of U.S. and International copyright law. In addition, Western’s and Northern Tier’s business and operations involve numerous risks and uncertainties, many of which are beyond Western’s and NTI’s control, which could materially affect their respective financial condition, results of operations and cash flows and those of the merged company.

The forward-looking statements are only as of the date made, and neither Western nor NTI undertake any obligation to (and each expressly disclaims any obligation to) update any forward-looking statements to reflect events or circumstances after the date such statements were made, or to reflect the occurrence of unanticipated events. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval in any jurisdiction where such an offer or solicitation is unlawful. Any such offer will be made only by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, pursuant to a registration statement filed with the SEC. The retail segment includes retail service stations, convenience stores, and unmanned fleet fueling locations in Arizona, Colorado, New Mexico, and Texas. Beyersdorfer (602) 286-1530 Michelle Clemente (602) 286-1533 Northern Tier Investor and Analyst Contact: Paul Anderson (651) 458-6494 Alpha IR Group (651) 769-6700 nti@alpha-ir.com Media Contact: Gary Hanson (602) 286-1777

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