Financial Review

Theories on Apples and Applesauce

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-16-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 190 = 17,511 SPX + 26 = 2019 NAS + 63 = 4634 10 YR YLD + .04 = 1.81% OIL + 2.32 = 48.57 GOLD + 17.70 = 1281.30 SILV + .83 = 17.88 Stocks bounced back after five sessions of losses. All 10 of the S&P 500 sectors were higher, though energy led the charge, rising 2.8%. U.S. crude oil futures settled up 5% after the International Energy Agency said there were signs that lower prices had begun to curb production in some areas. On the week, oil rose 0.7%, snapping a seven-week losing streak. The IEA report said that the market’s floor was still anybody’s guess, but “the sell-off is having an impact,” and “A price recovery – barring any major disruption – may not be imminent, but signs are mounting that the tide will turn. We love lower gas prices. A gauge of consumer sentiment jumped up to an 11 year high this month. The preliminary January reading on the University of Michigan’s consumer-sentiment index increased to 98.2, the highest level since January 2004, from a final December reading of 93.6. Also, more households were reporting increases in household incomes. Consumer inflation in December saw the biggest monthly drop in six years. Consumer prices, the CPI, fell 0.4% in December. You know the big driver for lower prices; energy prices plunged 4.7% in …

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Financial Review

Say Cheese

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-15-2015.mp3Podcast: Play in new window | Download (Duration: 13:17 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 106 = 17,320 SPX – 18 = 1992 NAS – 68 = 4570 10 YR YLD – .06 = 1.77% OIL – 2.28 = 46.20 GOLD + 33.50 = 1263.60 SILV + .11 = 17.06 After going through all of 2014 without a losing streak of more than three days, the S&P 500 today completed its second slide of five straight days. The benchmark gauge is down 3.4 percent over the past five days. For the past 3 years the Swiss have kept their currency, the Swiss franc, from getting too strong; they imposed a cap to keep the euro from trading below 1.20 francs. In early 2010 one franc was less than 0.7 euro. By the middle of 2011 the franc was nearly at parity against the euro, a massive move in a very short period. As the Eurozone experienced economic strife, Switzerland was calm and offered a safe haven. As money poured in, the franc became more and more expensive; which means that things made in Switzerland became more expensive when the Swiss exported. So, they capped the franc. That basically involved printing more francs and buying more euros. Fast forward to 2015, and the Eurozone is once again experiencing economic strife; money is once again pouring into Switzerland as a safe haven, and after 3 years the Swiss just threw up their hands and …

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Financial Review

Banks Under Assault

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-14-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 186 = 17,427 SPX – 11 = 2011 NAS – 22 = 4639 10 YR YLD – .05 = 1.84% OIL + .28 = 46.17 GOLD – 1.80 = 1230.10 SILV – .25 = 16.94 The roller coaster ride continues, with a 345 point swing in the Dow Industrials from the intraday high and low. A couple of economic reports set the stage this morning. First, retail sales in the US sank in December largely because of cheaper gasoline prices, but most stores posted surprisingly weak results during the busiest month of the shopping season. Sales at retailers dropped a seasonally adjusted 0.9% last month to mark the biggest decline in nearly a year. Excluding gas and car sales, retail sales fell 0.3%. It was the biggest decline for retail sales in 11 months. One month does not make a trend but this kind of puts a dent in the idea that consumers would save money at the gas station but spend elsewhere. Instead it looks like people are tightening purse strings, which is symptomatic of deleveraging and deflation; it might also be indicative of how much the economy has changed in terms of job stability, wage stagnation, and retirement prospects; all of which point to much greater pressures to save. The Federal Reserve then offered confirmation of a weak sales. The Fed’s Beige Book said most …

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Financial Review

One Thing Is One Thing

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-13-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 27 = 17,613 SPX – 5 = 2023 NAS – 3 = 4661 10 YR YLD – .02 = 1.89% OIL – .03 = 46.04 GOLD – 2.30 = 1232.10 SILV + .43 = 17.14 The stock market went south so fast. We started the day with a triple digit gain, up more than 250 points, then down by more than 100; there was a 425 point swing from high to low. It is earnings reporting season. Shares of home builder KB Homes fell 16% after reporting softer demand in the fourth quarter hit gross margins, which will continue to lag prior-year results for some time. CSX, the railroad company, today announced record fourth-quarter 2014 net earnings of $491 million, a 15 percent increase from $426 million for the same period last year. The company also generated record fourth-quarter earnings per share of $0.49, up 17 percent from $0.42 per share in 2013. Tomorrow, JPMorgan and Wells Fargo will report earnings; Bank of America reports on Thursday, and Goldman Sachs on Friday. MetLife wants the government off its back. The US’s biggest life insurer is going to sue to challenge its designation as “systemically important”. The institutions that receive the designation are expected to bolster their capital and liquidity and to submit to heightened monitoring by the Federal Reserve under the 2010 Dodd-Frank Act to prevent another …

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Financial Review

Earnings Season Kickoff

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-12-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 96 = 17,640 SPX – 16 = 2028 NAS – 39 = 4664 10 YR YLD – .06 = 1.91% OIL – 2.58 = 45.78 GOLD + 10.00 = 1234.40 SILV + .09 = 16.71 The drop in the price of oil has been amazing; the daily moves are big: 3%, or 4% or more on any given day (5% today). Eventually prices will bottom out but we get no indication of where that bottom is. Today, Goldman Sachs made sharp cuts to its oil price projections. The bank’s energy analysts revised down their three-month forecast for WTI crude to $41 a barrel from a previous estimate of $70. They see WTI at $39 a barrel in six months and $65 a barrel in a year, versus previous price forecasts of $75 and $80, respectively. They see Brent at $42 in three months, $43 in six months and $70 in 12 months versus previous estimates of $80, $86 and $90, respectively. When oil is trading at $45 and falling, it really isn’t shocking to say it could drop to $41. Goldman Sachs is playing catchup, and today’s revisions clearly show that their earlier estimates were grossly inaccurate. In an interview with Maria Bartiromo of Fox Business News published in USA Today, Saudi Prince Alwaleed bin Talal said: “If supply stays where it is, and demand remains weak, …

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Financial Review

The December Jobs Report

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-09-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 170 = 17,737 SPX – 17 = 2044 NAS – 32 = 4704 10 YR YLD – .05 = 1.97% OIL – .54 = 48.25 GOLD + 14.50 = 1224.40 SILV + .14 = 16.62 Each month the Bureau of Labor Statistics reports on total nonfarm payroll employment. The Jobs Report is usually released on the first Friday of each month. Last Friday was still considered part of the holidays, so we got the report this morning. In December the economy added 252,000 net new jobs and the unemployment rate dropped to 5.6% from 5.8%. Job gains from November and October were revised higher by 50,000 additional jobs. November now posted 353,000 jobs, and October revised up to 261,000. Job gains occurred in professional and business services, construction, food services and drinking places, health care, and manufacturing. The economy has now added 200,000 or more jobs each month for the past 11 consecutive months. 2014 was the best year for total employment since 1999, and the best year for private employment since 1997. And for the past 3 months we’ve average 289,000, which is about as good as I can recall. Private-sector employment, which in December clocked in at 118 million, has grown 10.4% from its 2009 low. The nation has gained back all the jobs it lost during the recession, and added some more. The economy …

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Financial Review

Admit It

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-08-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 323 = 17,907 SPX + 36 = 2062 NAS + 85 = 4736 10 YR YLD + .06 = 2.01% OIL + .08 = 48.73 GOLD – 2.20 = 1209.90 SILV – .16 = 16.48 Since 1928, the Standard & Poor’s 500 has started the year with 3 straight losing days eight times. And only once has the S&P 500 finished one of those years in the red. During the 8 years since 1928 that the S&P started with 3-day losing streaks, the index has returned 8.3% on average. For all years since 1928, the S&P has returned 7.5% on average. Maybe it’s a good thing to start the year with 3 straight losing sessions. Then there is the idea that the first 5 trading sessions of the year can be used to extrapolate the direction of the market for the year. If that is the case, then we might expect some rough sledding for the markets in the early part of the year followed by a strong second half of the year. This is a variation on the idea of the January barometer, which says (basically) that if January is positive, the year will be positive, and vice versa; that didn’t work last year, but it is accurate about 89% of the time. Of course, that’s just probabilities and tendencies. We don’t know where the market …

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Financial Review

Columbo Fed

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-07-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 212 = 17,584 SPX + 23 = 2025 NAS + 57 = 4650 10 YR YLD – .01 = 1.95% OIL + .59 = 48.52 GOLD – 8.20 = 1212.10 SILV – .02 = 16.63 After the holidays we are finally starting to get back to economic data. Let’s start with the ADP payroll report, which shows 241,000 net new private sector jobs for December. Breaking down that number, private-sector service providers added 194,000 jobs, while goods producers added 46,000 jobs. By company size, small businesses added 106,000 private-sector jobs, large businesses added 54,000 and medium businesses added 70,000. The Labor Department reports on jobs Friday morning and we tend to look to the ADP report as a precursor to the government’s monthly report, but it isn’t a real accurate predictor. Last month the government reported 321,000 new jobs and ADP initially showed 208,000 for November. Still, we are probably looking for around 220,000 to 240,000 new jobs on Friday and today’s report was in line with that estimate. Meanwhile, Gallup has its own Job Creation Index which ended 2014 at plus 27 in December, eight points higher than where it started in January. The index has remained between plus 27 and plus 28 since May; essentially it has remained at the same level for the past eight months, suggesting the job market plateaued in the latter …

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Financial Review

Greek Drama

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-06-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 130 = 17,371 SPX – 17 = 2002 NAS – 59 = 4592 10 YR YLD – .08 = 1.96% OIL – 2.23 = 47.81 GOLD + 14.20 = 1220.30 SILV + .36 = 16.65 The 114th Congress convened today for the first time. Mitch McConnell was selected as Senate Majority Leader. John Boehner was elected to a third term as Speaker of the House. The good news is that it won’t take much effort to outperform the 113th Congress; that bar was set pretty low. Let’s quickly cover the economic data. Commerce Department report factory orders dropped 0.7% in November. Orders for durable goods fell 0.9%, while orders for non-durable goods fell 0.5%. The setback was paced by declining demand for business equipment such as electronics and industrial machinery. The Institute for Supply Management said its nonmanufacturing index fell to 56.2% from 59.3% in November. Yet readings over 50% signal that more businesses are expanding instead of contracting and the index is coming off a nine-year high, so some cool down might be inevitable. Retailers, hotels and restaurants topped the list of the 12 non-manufacturing industries that reported growth in December, another sign that gains in employment and cheaper gasoline are giving American households a boost. Cheaper fuel helped drive down the index of prices paid at service providers to 49.5, the first time since September …

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Financial Review

Buckle Your Seat Belts

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-05-2015.mp3Podcast: Play in new window | Download (Duration: 13:19 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 331 = 17,501 SPX – 37 = 2020 NAS – 74 = 4652 10 YR YLD – .08 = 2.04% OIL – 2.82 = 49.87 GOLD + 15.40 = 1206.20 SILV + .40 = 16.29 If Santa Claus should fail to call, bears may come to Broad and Wall. That is the old saying and most people think the Santa Claus rally covers the month of December, or maybe the week leading to Christmas; actually, the rally time frame covers the last 5 trading days of the year and the first 2 trading days of the New Year, which would include today. And today the markets were down; the worst day in 3 months. The Santa Claus rally is really an indicator. In 1999-2000 rally timeframe suffered a horrendous 4% loss. According to the Stock Trader’s Almanac, on January 14, 2000, the Dow started its 33-month 37.8% slide to the October 2002 midterm election year bottom. NASDAQ cracked eight weeks later falling 37.3% in 10 weeks, eventually dropping 78% by October 2002. Saddam Hussein cancelled Christmas by invading Kuwait in 1990. Energy prices and Middle East terror woes may have grounded Santa in 2004. In 2007 the third worst reading since 1950 was recorded as subprime mortgages and their derivatives lead to a full-blown financial crisis and the second worst bear market in history. For the past 4 trading sessions, …

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