Financial Review

Financial Review Market Scorecard 07-10-2014

    DOW – 70 – 16,915 SPX – 8 = 1964 NAS – 22 = 4396 10 YR YLD – .01 = 2.53% OIL + .59 = 102.88 GOLD + 8.70 = 1336.30 SILV + .32 = 21.52

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Financial Review

If It’s Not One Thing…

We start today with the hottest stock in the world: CYNK Technology, ticker CYNK.  It is a one person company, which has something to do with a website, with headquarters in Belize, maybe. There is no indication of revenue, possibly about a million in losses. It had been trading for a couple of pennies, and then for no apparent reason it started trading higher. After closing at 6 cents on May 15 it began its surge with a 3,650% jump to $2.25 on June 17. The stock climbed as much as 49% to $21.95 earlier today in over-the-counter trading on volume of more than 380,000 shares before erasing its gain to close down 5.5% to $13.90, and a market cap of a little more than $4 billion. How and why did this happen? Nobody seems to have an answer, but I think it would be a very, very bad idea to do anything with this stock, just to be clear.   Se nao e uma coisa e outra coisa.   Which is Portuguese for “if it’s not one thing, it’s another thing.”   I’m sure somebody in Lisbon was fully aware of what was going on, and they were waving their arms and screaming about the bank that was ready to implode; and nobody paid any attention because there was so much else happening around the world. Iraq is fractured, bombs are flying in Israel, Germany is expelling a US spy, the Italian economy looks wobbly, Libya, Ukraine, Nigeria, Thailand, …

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Financial Review

Financial Review Market Scorecard 07-09-2014

DOW + 78 = 16,985 SPX + 9 = 1972 NAS + 27 = 4419 10 YR YLD – .02 = 2.54% OIL – 1.46 = 101.94 GOLD + 7.00 = 1327.60 SILV + .08 = 21.10

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Financial Review

Waiting For Liftoff

  The Federal Reserve released the minutes of the most recent FOMC policy meeting from June 17-18.   The Fed is going to take away the punchbowl. As of October, no more punchbowl. That’s it, QE is drying up. I think we all knew that was coming. And then after the Fed stops buying Treasuries and mortgage backed securities, they will get around to probably raising their target on interest rates, but rates would remain near zero for a “considerable time” (probably the spring of 2015) after the Fed halts its program of bond purchases.   According to the minutes, there continues to be division over when the Fed should stop reinvesting proceeds of the $4.2 trillion in assets it purchased to support financial markets. Ending reinvestment will put the central bank’s balance sheet on a declining path, and some members argue that should not take place until interest rates have been increased. Fed officials also agreed that the rate of interest on excess reserves would play a “central role” in moving rates higher when the time comes.   And this is a fluid timeline for all this; it is partly dependent on “liftoff”; that’s the new word from the Fed – liftoff. At some point, the economy will slip the surly bonds of earth and wheel, soar, and swing high in the sunlit silence, and do a hundred things we haven’t dreamed of for such a long, long time. Someday, we’ll have liftoff.   The market players looked at …

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Financial Review

Financial Review Market Scorecard 07-08-2014

DOW – 117 = 16,906 SPX – 13 = 1963 NAS – 60 = 4391 10 YR YLD – .05 = 2.56% OIL – .13 = 103.40 GOLD – .40 = 1320.60 SILV – .03 = 21.12

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Financial Review

Everything Except Productive Purpose

  Down 2 days and already I’m seeing the financial talking heads asking if this is the start of a correction. Just a reminder that markets go up and down and sometimes sideways. The markets don’t need a big reason to move. Right now, we’re heading into earnings reporting season, and a few things happen; first, some investors might look at a position and determine that prospects for earnings are not so great, or some investors are taking the opportunity to put some cash in their pockets, just in case they see a bargain basement opportunity.   A trend in place is more likely to continue than it is to reverse, and it reverses when we can see clear evidence of a reversal. Yes, the market looks overvalued by many metrics, yes there seems to be irrational exuberance; but the markets can remain irrational longer than you can remain solvent; yes, we’ve seen a couple of down days but we’ve gone 33 months without a correction, but we’ve had a bunch of down days during that same time. Right now, we’re seeing a minor pullback into a trading range as we await earnings season. Should you stay or should you go? The markets have hit recent highs, and so you have to wonder if you get out when the getting is good. After hitting record highs, the past 2 days have seen declines; let me be very clear, 2 down days do not constitute a trend; not unless you trade …

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Financial Review

Financial Review Market Scorecard

DOW – 44 = 17,024 SPX – 7 = 1977 NAS – 34 = 4451 10 YR YLD – .03 = 2.62% OIL – .67 = 103.39 GOLD – .50 = 1321.00 SILV – .10 = 21.15

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Financial Review

Small Steps

    It was a long holiday weekend that was over way too fast. And the problems of the world haven’t gone away. Let’s get caught up on some of the big stories.   In Iraq, the situation is deteriorating. There had been muted hope for some sort of an inclusive government to hold the country together. Don’t count on it. Iraq’s new parliament has called a recess and they won’t meet again for 5 weeks. So Iraq is now politically paralyzed. Meanwhile, a Sunni Islamist insurgency killed an army general near Baghdad.  It looks like Prime Minister Maliki is digging in his heels, raising the risk that Iraq will fragment along ethnic and sectarian lines.   ISIS, the Sunni insurgents are holding territory in western Iraq and just north of the capitol. The Iraqi military, backed by Shi’ite militias and volunteers, has yet to take back any major cities but is trying to advance on Tikrit. Kurds in northern Iraq have taken advantage of the chaos to expand their autonomous territory in northern Iraq. Most Sunnis and Kurds walked out of the last parliament, saying they believed the prime minister and president should be chosen along with the speaker as a package, not one at a time. They could not resolve the impasse, so the acting speaker postponed the meeting.   In eastern Ukraine, pro-Russian rebels built barricades in the streets of Donetsk and it looks like they will try to make a stand. Although most shops and businesses …

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Financial Review

Financial Review Market Scorecard

DOW + 92 = 17,068 SPX + 10 = 1985 NAS + 28 = 4485 10 YR YLD + .02 = 2.65% OIL – .42 = 104.06 GOLD – 7.60 = 1320.60 SILV – .02 = 21.23

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Financial Review

Jobs Report Thursday

  Jobs Report Thursday   Record high closes for the Dow and the S&P 500.   The first Friday of each month is typically a big day for economic data because the Labor Department releases the nonfarm employment report. I have always considered this to be one of the most important economic reports because jobs make everything happen; it’s the stuff of work and production and a driver of capital, and sweat and blood. So, we spend extra time to really dig into the jobs report, which was released today because tomorrow is a holiday.   This was a very good jobs report. The economy added 288,000 net new jobs in June and the unemployment rate dropped from 6.3% to 6.1%; that’s the lowest unemployment rate since September 2008. The report topped estimates of 215,000 jobs. The jobs reports for April and May were revised higher; April was revised from 282,000 to 304,000 net new jobs; May was revised from 217,000 to 224,000 new jobs; meaning there were 29,000 more jobs than previously reported.   June marked the best five-month stretch of job creation since early 2006; for the past five months the economy has added at least 200,000 jobs per month. The three-month average rate of hiring in the second quarter now stands at 272,000, compared with 190,000 a month in the first quarter.   The economy has added private sector jobs for 52 straight months. During this span, 9.7 million private sector jobs have been created. Over the …

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