Financial Review

A Solid Week in a Rocky Month

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-24-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 127 = 16,805 SPX + 13 = 1964 NAS + 30 = 4483 10 YR YLD – .01 = 2.27% OIL – .80 = 81.29 GOLD – .90 = 1232.00 SILV + .01 = 17.31 Last Friday we covered some technical analysis of the equity markets, looking at support and resistance, as well as a short-term bullish pattern, a morning star that had formed. Sure enough, this week provided the follow through on that bullish pattern. Major indices snapped a 4-week string of losses. For the week, the Dow gained 425 points, or 2.5%. The S&P gained 78 points, or 4.1%. And the weekly gain for the Nasdaq was 225 points or 5.2%. So, where do the markets go from here? The pullback that started September 19th never really materialized into a full blown correction, and there is a feeling that there should be more to the downside, but as of today the markets seem to be firmly in retracement mode. Better to let the market tell you when that retracement ends than to try to impose your opinions on the market. And then remember that we are almost through the treacherous month of October. The Stock Traders’ Almanac reminds us that “in 64 years before 2014, DJIA and S&P 500 have both declined 26 times in October. However, these October declines were followed by 23 DJIA November-December gains averaging …

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Financial Review

A Boatload of Economic News and Earnings Reports

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-23-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 216 = 16,677 SPX + 23 = 1950 NAS + 69 = 4452 10 YR YLD + .05 = 2.28% OIL + 1.33 = 81.85 GOLD – 9.10 = 1232.90 SILV + .02 = 17.30 The S&P 500 has risen five times in the past six days, pushing the gauge up 4.9 percent since Oct. 15 and recouping about half the losses from a selloff that began in mid-September; the S&P is still down about 3 percent from a record. The Federal Housing Finance Agency, which tracks deals involving mortgages backed by Fannie Mae and Freddie Mac, said home prices in August were up 4.8% from the year-earlier period; and up a seasonally adjusted 0.5% in August from July. The average rate for a 30-year fixed mortgage was 3.92 percent, down from 3.97 percent last week. The average 15-year rate dropped to 3.08 percent from 3.18 percent. Mortgage rates are now at the lowest levels since the summer of 2013. Refinancing applications jumped 23 percent in the week ended Oct. 17 to an 11-month high. The number of people who applied for US unemployment benefits rose by 17,000 last week to 283,000, but initial claims remained below the key 300,000 level for the sixth straight week. The Conference Board’s leading economic index rose 0.8% in September, after no change in August. The index points toward improving employment and income growth …

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Financial Review

Inflation or the Lack Thereof

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-22-2014.mp3Podcast: Play in new window | Download (Duration: 13:21 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 153 = 16,461 SPX – 14 = 1927 NAS – 36 = 4382 10 YR YLD + .02 = 2.23% OIL – 2.06 = 80.43 GOLD – 8.40 = 1242.00 SILV – .34 = 17.27 The major stock indices were higher this morning, then they dropped about the time were heard reports of a shooting in Ottawa Canada, near the parliament building. The shooting in the Canadian capital left a soldier dead and the city on lockdown. The Labor Department said the Consumer Price Index edged up 0.1% last month. In the 12 months through September, the CPI rose 1.7%. The core CPI, which strips out food and energy prices, ticked up 0.1% last month, while the year-on-year change held steady at 1.7%. Energy prices fell for a third straight month in September, with gasoline costs slipping 1.0% after dropping 4.1% in August. Food prices gained 0.3% in September and were up 3.0% from a year ago, the largest gain in nearly 2-1/2 years. Shelter costs increased 0.3% in September after rising 0.2% in August. The medical care index increased 0.2%, with prices for nonprescription drugs posting a record increase. Airline fares declined for a third straight month, while prices for new motor vehicles and apparel were unchanged. Prices for used cars and trucks fell for the fifth straight month. Wages remain stagnant. Average hourly earnings adjusted for inflation fell …

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Financial Review

Financial Engineers at the Gate

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-21-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 215 = 16,614 SPX + 37 = 1941 NAS + 103 = 4419 10 YR YLD + .03 = 2.21% OIL + .64 = 82.55 GOLD + 2.50 = 1250.40 SILV + .09 = 17.62 In economic news, the National Association of Realtors reports sales of existing homes rose 2.4% in September to a seasonally adjusted annual rate of 5.17 million, hitting the fastest pace in one year and rebounding from an unexpected drop in August. However, September’s pace of sales was down 1.7% from a year earlier. So, the housing market isn’t roaring, but lower interest rates managed to pull some buyers off the sidelines last month. Low interest rates are just part of the equation in the housing market; buyers also need to be employed. The Labor Department today released state unemployment numbers, and in 15 states, the unemployment rate is now under 5%; that list includes: North Dakota at 2.8%, South Dakota at 3.4%, Utah 3.5%, and Nebraska, Minnesota, Hawaii, New Hampshire, Vermont, Idaho, Iowa, Montana, Dolorado, Oklahoma, Wyoming, and Kansas. Georgia has the highest unemployment rate at 7.9%. Arizona made the bottom 10 with a 6.9% unemployment rate, a full percentage point higher than the national average. Reuters reported the European Central Bank was looking at buying corporate bonds as soon as December in its efforts to revive the Eurozone economy. The move to buy corporate …

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Financial Review

A Tale of Three Stocks

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-20-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 19 = 16,339 SPX + 17 = 1904 NAS + 57 = 4316 10 YR YLD – .02 = 2.18% OIL – .21 = 81.85 GOLD + 8.70 = 1247.90 SILV + .16 = 17.53 A nice bounce in the S&P 500 index and the Nasdaq Composite. For most of the session, the Dow was in negative territory, clawing its way to positive, barely. There are 3 stocks that had a compelling story today. We start with IBM, which reported its third-quarter results; a 10th consecutive period of falling sales, marked by weaker performance in growth markets. IBM said its long-standing forecast of earnings per share of $20 for 2015 is no longer achievable. IBM lowered its forecast for free cash flow. The company said it was selling its money-losing chip-making business to GlobalFoundries, a move to further cut costs and focus on its more profitable, faster-growing businesses. Once upon a time, IBM was a pioneer in advancing semiconductor technology, its manufacturing capability fell behind others that produced chips in large volume, but now they will have to pay GlobalFoundries $1.5 billion to take the chip division, while taking a $4.7 billion charge. IBM has been divesting slower-growing and unprofitable businesses, but like many older tech companies, it is caught in the middle; sloughing off the old and expensive without yet having a foothold in the new. Some customers are …

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Financial Review

Floors and Ceilings

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-17-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 263 = 16,380 SPX + 24 = 1886 NAS + 41 = 4258 10 YR YLD + .05 = 2.20% OIL + .27 = 82.97 GOLD – .70 = 1239.20 SILV – .10 = 17.37 The markets were down for the week, even with the bounce today. For the week, the Dow and the S&P each dropped about 1%; the Dow was down 164 points on the week, and the S&P was down 20 points. The S&P is now down for 4 consecutive weeks. Let’s take a look at the charts. Earlier in the week I talked about support and resistance. Someone mentioned to me that they weren’t quite clear on the concept. So, here is a good way to look at these topics. Support is the floor and resistance is the ceiling. Think of a chart as a staircase under construction. The stairs are being built, hopefully higher and higher, and to prop up the stairs, you have to have a structure, or floors and ceilings. When you break through the ceiling to a new higher level, that ceiling then becomes the floor for the next level up. In other words, resistance becomes support. If the staircase of price falls, the last floor will catch you, or provide support. Then to go higher yet again, you will have to punch through that ceiling, or resistance, again. So, let’s look …

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Financial Review

Behind the Curtain

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-16-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 24 = 16,117 SPX + 0.27 = 1862 NAS + 2 = 4217 10 YR YLD + .06 = 2.15% OIL + 1.16 = 82.94 GOLD – 2.20 = 1239.90 SILV – .08 = 17.47 The Dow is down for a sixth consecutive session. We started the morning down almost 200 points, so there is that. Part of yesterday’s volatility is being blamed on mini-flash crashes; 179 to be precise. Basically the high frequency traders yank their bids, as their algorithms try to catch up with big moves. It isn’t really a flash crash so much as a lack of liquidity. Take a deep breath. Think about how you are invested. Consider whether you are diversified across asset classes. The market has not collapsed. It has gone down in a fairly fast and furious manner, but it has not collapsed. What will happen next? Will the market bounce back? Will it go sideways? Will the pullback continue and become really painful? You don’t know; I don’t know; the market doesn’t know; nobody knows. Take a deep breath, consider where you are and where you want to be in the future. The stock market is always a gamble. Maybe you want to gamble with a part of your money, and that’s fine. Maybe you are tired of gambling and want to find something safer; that’s cool, too. Just understand what you’re …

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Financial Review

Third World Stuff

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-15-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 173 = 16,141 SPX – 15 = 1862 NAS – 11 = 4215 10 YR YLD – .11 = 2.09% OIL – .13 = 81.71 GOLD + 8.90 = 1242.10 SILV + .05 = 17.55 Go back a mere 18 trading sessions and the market was at all-time highs. The Dow hit an intraday high of 17,350 and a closing high of 17,279, on September 19th; that was 18 trading sessions in the past. For the Nasdaq composite we have seen a 10% correction from recent highs. That means this drop happened fast, and it also means the bear may have more room to run; this move is not mature in terms of duration or magnitude. The major indices have dropped under the 200 day moving average; we were waiting for confirmation; we got it. The S&P looked to bounce off a different trendline. If you draw a straight line across the S&P lows beginning with the lows from 2011, which is where we saw support and a bounce today, at the 1820 level; it is also very close to the support levels from April at about 1815, which we talked about on Monday. That is an intermediate level of support, but it held today, and you have to respect the line, unless or until it breaks down. Once we hit certain levels, people start to feel the pain and …

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Financial Review

Double Irish With a Side of Knowledge Box

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-14-2014.mp3Podcast: Play in new window | Download (Duration: 13:17 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 5 = 16,315 SPX + 2 = 1877 NAS + 13 = 4227 10 YR YLD – .08 = 2.20% OIL – 3.76 = 81.98 GOLD – 4.90 = 1233.20 SILV – .11 = 17.49 The Dow was down slightly, while the S&P and Nasdaq snapped a 3 day slide, but this was almost a quiet day; call it neutral. A follow-up on yesterday’s discussion of the 200 day moving average. The S&P 500 dropped down to the 200 day moving average on Friday (right around 1905), and then fell right through the trend line yesterday. We talked about the possibility of a bounce; and I don’t think today’s minor move qualifies as a bounce, even though it was a positive move. So, we are still waiting for a possible bounce. The 200 day moving average is a lagging indicator, and so for now, the trend line is still moving higher; which increases the prospects for a bounce. When the price drops below a declining 200 day moving average, it is considered extremely bearish and the probability of a bounce is very low. So, we wait for confirmation. It is earnings reporting season, and today’s reports feature the banks. We start with JPMorgan Chase, the nation’s largest bank by assets, reporting third quarter net income of $5.6 billion, or $1.36 per share, a big improvement from the same period last …

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Financial Review

Forget Complacency

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-13-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 223 = 16,321 SPX – 31 = 1874 NAS – 62 = 4213 10 YR YLD closed 2.28% OIL – .69 = 85.05 GOLD + 14.10 = 1238.10 SILV + .10 = 17.60 The major indices were up and then down; small moves earlier in the session; then, in the final hour stocks slipped and kept falling. The S&P 500 has fallen 6.8 percent from its Sept. 18 record, making this the worst pullback in two-and-a-half years. The Russell 2000 sank 4.7 percent last week. The small-cap index entered a correction after sliding more than 10 percent from an all-time high in March. The Dow Jones Industrial Average has dropped 5.5 percent from its record last month, while the Nasdaq Composite Index has slumped 8.3 percent from a 14-year high reached in September. The Volatility Index, or VIX, rose 13 percent today to 24, the highest level since June 2012. Forget complacency. The final hour collapse coincided with a report that an Emirates Airline plane in Boston was surrounded by medical crews and they removed five passengers over concerns about Ebola. But there is more to today’s trading than an Ebola scare. Oil prices continued to slide. Saudi Arabia is saying they are comfortable with oil prices in the sub-$90 range. The Saudis don’t necessarily want prices to slide further, but they are unwilling to shoulder production cuts unilaterally and …

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