Financial Review

Jobs Report Friday

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-07-2014.mp3Podcast: Play in new window | Download (Duration: 13:17 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS[powerpress Financial Review DOW + 19 = 17,573 SPX + 0.71 = 2031 NAS – 5 = 4632 10 YR YLD – .06 = 2.31% OIL + .60 = 78.51 GOLD + 36.50 = 1178.80 SILV + .32 = 15.85 The economy added 214,000 net new jobs in October. The unemployment rate dropped from 5.9% to 5.8%. The 5.8 percent official unemployment rate is the lowest since the summer of 2008. The August report was revised higher to 203,000 and the September report was revised higher to 256,000; for a net increase of 31,000 jobs added from revisions. Employment is now up 2.64 million year-over-year, and up 2.3 million year to date. So far in 2014 the US has gained an average of 229,000 jobs a month, the fastest pace since 1999. October was the ninth consecutive month of 200,000 or more jobs gained, and that hasn’t happened since 1994. Total employment is up 10 million from the employment recession low and up 1.3 million from the previous peak; although it should be noted that full-time employment has not returned to the previous peak, while part-time employment is quite a bit higher than the peak. Private employment is up 10.6 million from the employment recession low. This latest report represents 56 consecutive months of private-sector job growth, which represents the longest streak in US history, but it isn’t the strongest streak of job growth. …

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Financial Review

Taking on Water

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-06-2014.mp3Podcast: Play in new window | Download (Duration: 13:17 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 69 = 17,554 SPX + 7 = 2031 NAS + 17 = 4638 10 YR YLD + .03 = 2.38% OIL – .70 = 77.98 GOLD + 1.30 = 1142.30 SILV + .11 = 15.53 Record highs for the Dow Industrial Average and the S&P 500 index. Milk and cookies time. Outplacement consultant Challenger, Gray & Christmas says layoffs increased by 51,000 last month. Layoffs are down 4% from a year ago, and the increase in October follows a 14 year low in September. Meanwhile, the Labor Department reports the number of Americans applying for new jobless benefits fell by 10,000 last week, to 278,000; the eighth straight week under 300,000. This is all part of the setup for tomorrow morning’s monthly jobs report. The big news today comes from the European Central Bank; ECB president Mario Draghi announced the central bank will increase its balance sheet by €1 trillion, or about $1.2 trillion, over the next 2 years. Interest rates are already at record lows, and Draghi has said they can go no lower. The ECB has issued long-term loans to banks and started buying covered bonds in the hope of flooding the economy with enough liquidity to ease credit constraints. Purchases of asset-backed securities are due to start this month. Exactly what the ECB will purchase remains uncertain, but they are likely to move into the €1.4 trillion …

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Financial Review

Milk and Cookies in the Land of No Satisfaction

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-05-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 100 = 17,484 SPX + 11 = 2023 NAS – 2 = 4620 10 YR YLD un = 2.35% OIL + 1.69 = 78.88 GOLD – 28.20 = 1141.00 SILV – .72 = 15.42 Record highs for the Dow Industrials and the S&P 500. The midterm election is history, and it was a big night for the GOP. Republicans will have at least 52 Senate seats, a gain of 7. In the House, the GOP will now have at least 243 seats, a gain of 14. The GOP also gained 2 net governorships. So it was a big night. However, Obama was not on the ballot, even though some of the campaign ads made it sound that way; he’s got 2 more years and he still has veto power. It takes a two-thirds majority in both the House and Senate to override a veto. Republicans have nowhere near two-thirds of either chamber. So, get ready for 2 more years of gridlock. One takeaway is that people are not satisfied with the economic progress of the past few years. While Wall Street is at record highs and the unemployment rate has dropped, that just isn’t enough. Fewer people participated in stock market gains and even though more people have jobs, the jobs aren’t paying what they used to. It doesn’t mean the numbers are wrong; the Dow closed at 17,484 and …

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Financial Review

Lather, Rinse, Repeat

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-04-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 17 = 17,383 SPX – 5 = 2012 NAS – 15 = 4623 10 YR YLD – .01 = 2.34% OIL – 1.31 = 77.47 GOLD + 2.90 = 1169.20 SILV – .11 = 16.13 Election Day 2014! We should all be very, very happy. Forget about red and blue, we can all count our blessings because the campaign ads on radio and TV are going away. There is one redeeming thing about this whole election. It will be over in a few hours. Say hallelujah! Or you could say that it’s amazing that anyone bothers to vote given that our choices are between tweedle dumb and tweedle dumber. Still, I went to the polls today, early, and I cast my ballot. I was the only voter voting. In a few hours we’ll get the results. And the most likely result is that not much will change, despite the drama and despite hundreds of millions to persuade you. It takes a fortune for a politician to get beat these days, but most of the money isn’t real, it’s magic money that doesn’t belong to anybody, or at least nobody is willing to admit they spend money on politics. We’ve got the best politicians money can buy. The present split Congress is the least-productive in US history. Regardless of the election’s outcome, the 114th Congress is unlikely to be any more …

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Financial Review

Mangled Expectations

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-03-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 24 = 17,366 SPX – 0.24 = 2017 NAS + 8 = 4638 10 YR YLD + .01 = 2.35% OIL – 2.03 = 78.39 GOLD – 7.60 = 1166.30 SILV – .03 = 16.25 No milk and cookies today, however the Dow and S&P hit intraday record highs. Construction spending fell 0.4% in September to a seasonally adjusted annual rate of $950 billion. Spending fell 0.6% for nonresidential projects and dropped 1.3% for public construction projects, but rose 0.4% for residential projects. The National Association of Realtors reports first-time buyers’ share of home sales has hit a 27 year low of just 33%; normally it would be closer to 40%. The final reading of Markit’s manufacturing purchasing managers’ index was 55.9 in October, down from the flash reading of 56.2 and well below September’s 57.9. The Institute for Supply Management said its manufacturing index jumped to 59% from 56.6% in the prior month; new orders, production, and the employment gauge all moved higher. Last week the Federal Reserve officially ended the Quantitative Easing plan, which has been around in various forms for about 5 years. The dollar reached multi-year highs against both the yen and euro; last week the Bank of Japan announced a surprise stimulus plan, called QQE2; on that news the stock markets hit a new high on Friday and global markets rallied. This week the European …

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Financial Review

Halloween Treats

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-31-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 195 = 17,390 SPX + 23 = 2018 NAS + 64 = 4630 10 YR YLD + .03 = 2.33% OIL – .44 = 80.68 GOLD – 25.90 = 1173.90 SILV – .28 = 16.28 Record highs, again. Back on September 19th, the Dow hit a record high close of 17,279. And then we watched the market tumbled for nearly a month. On October 17th we told you about a bullish reversal pattern, and it has been a strong move to new highs; up 1,100 from when I called the reversal, and up 1,545 from the lows of October 15. Also, a new closing high for the S&P 500, however, we did not take out the intraday high of 2019 from September 19. Let’s break down the moves for the month of October. The Dow is up 248. The S&P added 46 points. The Nasdaq is up 137 points for October to a 14-1/2 year high. In October we saw the yield on the 10 year note drop 18 basis points from 2.51%. Gold took a hard fall on Friday, at one point trading at levels not seen since 2010. And of course, a big move in oil down 10.75 a barrel. If you are looking for a really dramatic move, the Russell 2000 index of small cap stocks has bounced from a low of 1046 on October 13, to …

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Financial Review

Getting Better

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-30-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 221 = 17,195 SPX + 12 = 1994 NAS + 16 = 4566 10 YR YLD – .02 = 2.30% OIL + .53 = 81.95 GOLD – 12.80 = 1199.80 SILV – .63 = 16.56 We start with the government’s report on third quarter gross domestic product showing the economy grew at a 3.5% annualized rate between July and September. The Commerce Department reported the increase was primarily due to consumer spending, exports, and higher government spending on the federal, state and local levels. In four of the past five quarters, the economy has expanded at a rate of 3.5 percent or greater; the exception was in the first quarter, when the economy contracted by 1%. Year to date GDP is running at a 2.4% pace. Consumption and fixed investment, taken together, is up 2.8 percent over the last year. This is a pretty good growth rate, and it was better than estimates of 3% growth. The economy has performed well of late, consistently adding jobs for 4-1/2 year and reporting sturdy sales of both homes and new automobiles. Meanwhile, many are optimistic that lower gas prices at the pump can lead to higher spending from consumers. Consumer confidence readings are at their highest level in seven years; but consumer spending has been tepid; keep in mind that lower gas prices are considered part of the consumer spending numbers, and …

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Financial Review

The Grand Experiment

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-29-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 31 = 16,974 SPX – 2 = 1982 NAS – 15 = 4549 10 YR YLD + .04 = 2.32% OIL + .53 = 81.95 GOLD – 16.20 = 1212.60 SILV – .11 = 17.19 The Federal Reserve wrapped up their 2 day FOMC meeting. There were no surprises. The Fed is ending Quantitative Easing, just as they promised they would. There was a very slight change in their description of the labor market and inflation; saying underutilization in the labor market is gradually diminishing; and regarding inflation, the rate of price changes has slackened recently because of lower energy prices. The Fed kept their phrase “considerable time” to describe how long they will hold off raising interest rates. Quantitative Easing is Fed-speak for large scale asset purchases, or another way of saying the Fed had been buying US Treasuries and mortgages. At one point they were buying $85 billion a month. Over the past year they’ve scaled back purchases, cutting back about $10 billion after each FOMC meeting. Earlier this month they had scaled back purchases to $15 billion, and now the buying spree is over. Except it isn’t really over. The Fed has spent about $4.5 trillion and removed a tremendous amount of bonds and mortgages from the market, greatly reducing supply. The basic supply demand equation says that when you reduce supply, prices go up. Sure enough, …

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Financial Review

The Ghosts of October

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-28-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW+ 187 = 17,005 SPX + 23 = 1985 NAS + 78 = 4564 10 YR YLD + .03 = 2.29% OIL + .38 = 81.38 GOLD + 2.90 = 1229.00 SILV + .09 = 17.31 Today, we’ll start with a few earnings reports then move to economic news. After the close Facebook reported a profit of $806 million, or 30 cents a share, up from $425 million, or 17 cents a share, a year earlier. Excluding share-based compensation and other items, earnings rose to 43 cents a share from 27 cents. Revenue increased 59% to $3.2 billion. Earnings were up about 90%; revenue up about 60%. Shares were just a little lower in after-hours trade. Dupont reported operating earnings per share of $0.54 were up 20 percent from $0.45 per share last year, in-line with estimates. Pfizer reports a third-quarter profit of $2.67 billion, or 42 cents a share, up from $2.59 billion, or 39 cents a share. Revenue slipped 2% to $12.36 billion. Freeport-McMoRan reported earnings of 53 cents per share for third-quarter 2014, reflecting a decline of 32.9% from the year-ago earnings of 79 cents. Profit declined 32.8% year over year to $552 million, hurt by lower pricing of copper and gold. The S&P/Case-Shiller index of property values increased 5.6 percent from August 2013. Prices are still going up, but at a slower pace. Home prices in the 20-city …

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Financial Review

Monday.

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-27-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 12 = 16,817 SPX – 2 = 1961 NAS + 2 = 4485 10 YR YLD – .02 = 2.26% OIL – .52 = 79.92 GOLD – 5.90 = 1226.10 SILV – .10 = 17.21 In economic news: the National Association of Realtors reports pending home sales rose 0.3% in September, hitting the second highest level for this year. The index of pending home sales reached a seasonally adjusted 105 in September, compared with 104.7 in August. Slower price growth and more homes for sale are likely supporting pending home sales. Pending sales typically close within 2 months, and so this gauge augurs well for actual sales. Financial data firm Markit said its preliminary or ‘flash’ services sector purchasing managers index slipped to 57.3 last month, the lowest reading since April, from 58.9 in September. A reading above 50 signals expansion in the services sector. The index has been gradually declining for 4 months. The October readings would indicate fourth quarter GDP slowing to about 2.5%. Goldman Sachs analysts revised their price outlook for oil; they are decidedly more bearish, predicting $75 a barrel for the first quarter and second half of next year. The thinking is that US shale oil will be enough to keep prices down, and non-OPEC countries will continue to provide plenty of supply, so even if OPEC wants higher prices, they will find it difficult. …

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