Financial Review

What? Me Worry?

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-19-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 2 = 17,685 SPX – 3 = 2048 NAS – 26 = 4675 10 YR YLD + .03 = 2.35% OIL – .51 = 74.61 GOLD – 14.40 = 1184.10 SILV – .06 = 16.23 The Federal Reserve’s most recent FOMC meeting was October 28th and 29th; after the meeting they issued a statement saying that QE3 was finished; they painted a fairly positive picture off the economy to confirm their decision. Fed Chair Janet Yellen and her central bank colleagues last month focused on improvements in the labor market when they announced an end to their stimulative bond purchases. They also said that the risk of inflation remaining persistently below their goal had ebbed. Today, they released the minutes of the FOMC meeting and we get some better understanding of their thoughts. No bombshells, not much that was not expected. Policy makers last month “pointed to a somewhat weaker economic outlook and increased downside risks in Europe, China, and Japan,” in addition to a stronger dollar. There were concerns “that if foreign economic or financial conditions deteriorated further, US economic growth over the medium term might be slower than currently expected.” There was some debate over whether to acknowledge the weakening global economy; the general feeling was that the effects weaker growth overseas would “likely be quite limited,” and that any mention of global weakness could send an unwarranted …

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Financial Review

Some Outcomes Are So Predictable

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-18-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 40 = 17,687 SPX + 10 = 2051 NAS + 31 = 4702 10 YR YLD – .02 = 2.32% OIL – 1.34 = 74.32 GOLD + 9.80 = 1198.00 SILV + .07 = 16.31 Record highs for the Dow Jones Industrial Average (26th of 2014) and the S&P 500 Index (43rd of the year). While there are plenty of reasons for concern, the major stock indices have been climbing a wall of worry. Today, health care stocks pulled the market higher. Wholesale prices in the US increased in October as higher costs for services and food outweighed a slump in energy. The Producer Price Index was up 0.2% compared to a 0.1% drop in September. Wholesale prices excluding food and energy rose 0.4 percent after no change a month earlier. Compared with 12 months earlier, producer prices rose 1.5% and the core index increased 1.8 percent in the year ended October. Prices for goods dropped 0.4 percent last month, the most since April 2013. Energy costs decreased 3 percent last month, the biggest decline since March 2013. Wholesale food costs climbed 1 percent as prices of vegetables, eggs and meats increased. The cost of services increased 0.5 percent in October, and this is a major reason why the overall index was higher. Now normally services don’t jump that much. What happened? The nationwide average price of a gallon of …

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Financial Review

Work Hard and Invest in the Future

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-17-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 13 = 17,647 SPX + 1 = 2041 NAS – 17 = 4671 10 YR YLD + .02 = 2.34% OIL – .37 = 75.45 GOLD – 2.00 = 1187.50 SILV – .18 = 16.24 Another day, another record on Wall Street. A record high close for the S&P 500. The Dow did not close above Thursday’s record close of 17,652. The Dow Transports were down today, but Transportation stocks are the best performing names on the market over the past month. Since the market bottomed out on October 13th, the Dow Jones Transportation Average has soared an incredible 18%. So if you thought the S&P’s furious 11% rally has been a sight to behold, you clearly weren’t paying attention to the soaring plane, train and trucks. Another Merger Monday; Halliburton agreed to buy Baker Hughes for about $34 billion. Actavis agreed to buy Allergan for $66 billion. The Halliburton acquisition of Baker Hughes will unite 2 major oilfield services companies. Halliburton and Baker Hughes began discussions in mid-October; an interesting time as oil prices were falling, raising questions about the viability of expanding oil and gas exploration and development. The acquisition was on again, off again, and briefly turned hostile last week. The deal could still face regulatory scrutiny, even though Schlumberger is still the largest oilfield services company, bigger than a combined Halliburton/Baker Hughes. Halliburton has agreed to …

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Financial Review

Sprinting Up a Mountain

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-14-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 18 = 17634 SPX + 0.49 = 2039.82 NAS + 8 = 4688 10 YR YLD – .02 = 2.32% OIL + 1.74 = 75.95 GOLD + 26.40 = 1189.30 SILV + .64 = 16.41 The recent rally in the S&P 500 has been really, really strong. Today marked the 41st record high close for the S&P. In mid-September, the index dropped, and that continued until October 16th. On October 17th we told you about a bullish reversal pattern, and since then the S&P 500 has gained about 160 points. The S&P 500 has traded above its 5 day moving average for 21 consecutive sessions; this is unusual; it means the rally has been extremely strong and nearly non-stop; there were a couple of days where the index paused, but never really went down. The past 21 days resulted in a 12% gain; that’s like a runner sprinting up a mountain. The market is now extremely overbought. Typically, when the market is overbought, you might anticipate a pullback. We haven’t seen it yet, but we can anticipate and wait for the market to show us. There are plenty of reasons to think the stock market will continue higher. First reason is that it is in an uptrend right now; a trend in place is more likely to continue than it is to reverse. Another reason is that there is a …

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Financial Review

Dow Up, Oil Down, Quit Your Job

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-13-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 40 = 17,652 SPX + 1 = 2039 NAS + 5 = 4680 10 YR YLD – .02 = 2.34% OIL – 2.79 = 74.39 GOLD + .20 = 1162.90 SILV – .01 = 15.77 Record high close for the Dow Industrials. The Nasdaq Composite hasn’t seen record highs since the spring of 2000, when it closed at 5048, which is just 368 points, or about a 7% move from here. If you were unlucky enough to have bought the PowerShares QQQ exchange-traded fund, an ETF that tracks that top 100 non-financial stocks in the Nasdaq, on March 10, 2000, you’d still be in the red on that investment. Tech companies are once again in a leadership role. While Microsoft, Apple and several other tech leaders of today are trading at higher prices than 15 years ago, Intel and Cisco are still well below their 2000 peak prices. Of course the largest company in market cap is Apple at $660 billion. Apple shares have surged more than 40% so far this year, creating more than $160 billion in market value for shareholders, which coincidentally is about the same market cap as IBM, which was once considered the big player in tech. Today, Microsoft passed Exxon to become the second largest company in terms of market capitalization. Exxon has a market cap of $400 billion; Microsoft is worth $408 billion. Exxon’s …

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Financial Review

Catch a Falling Star

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-12-2014.mp3Podcast: Play in new window | Download (Duration: 13:20 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 2 = 17,612 SPX – 1 = 2038 NAS + 14 = 4675 10 YR YLD un = 2.36% OIL – 1.19 = 76.75 GOLD – 2.80 = 1161.10 SILV – .04 = 15.76 Stocks have been on a run lately, with the Dow Industrials and the S&P 500 hitting record highs yesterday, and the Dow Transports closing at a new high today. Yesterday, the S&P 500 marked its 40th new closing high of the year, versus 45 in 2013. The last five-day streak of record highs was in May 2013, and the next longest was eight days in June 1997. The Dow also hit a record yesterday, marking 6 consecutive record highs, its longest since June. The S&P 500 has closed above its 5 day moving average for the 19th consecutive session, a streak that has only occurred seven times in the past 20 years. And today did not reverse the trend. Typically, after a rally like this you might expect a pullback; not necessarily a correction, but a pullback; a pause to catch your breath. And so, now would not look like a good time to buy, but you also haven’t seen a signal to sell, at least not yet. Meanwhile, the advance has been so straight and fast that it hasn’t left any support levels in its wake. You might look at S&P 2000 as a round …

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Financial Review

Veterans Day 2014

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-11-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 1 = 17,614 SPX + 1 = 2039 NAS + 8 = 4660 10 YR YLD = 2.36% OIL + .12 = 77.52 GOLD + 12.60 = 1165.20 SILV + .14 = 15.85 The Dow and the S&P 500 hit intraday records today, then dipped into negative territory for most of the session, and then in the final minutes managed to eke out gains, good enough for another record high close. The bond market was sort of closed in observation of Veterans’ Day. The US Treasury observes the holiday, and since much of the bond market deals with Treasuries, most bond traders take the day off. Stock traders just keep trading. The stock market used to take a 2-minute pause to recognize veterans, but that ended a few years ago. Wall Street just doesn’t seem to have much respect. Back in the early 70’s, the politicians tried to change Veterans’ Day to October so it could be a Monday holiday, but that didn’t last long. Veterans’ Day of course sprang from Armistice Day, and the end of World War I, on the 11th hour of the 11th Day of the 11th month, the great guns went silent, and the war to end all wars was ended. A bunch of companies are offering deals for veterans. There are a bunch of restaurants offering a free meal or lunch or appetizers. Here’s …

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Financial Review

Net Neutrality

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-10-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 39 = 17,613 SPX + 6 = 2038 NAS + 19 = 4651 10 YR YLD + .05 = 2.36% OIL – 1.43 = 77.22 GOLD – 26.90 = 1152.60 SILV – .22 = 15.71 Record highs for the Dow Industrial Average and the S&P 500 index, plus new records for the Dow Transportation Average. We enjoy milk and cookies. The S&P 500 has rebounded 9.4 percent from a six-month low on Oct. 15. We’re still a couple of weeks away from Thanksgiving but third quarter earnings season is wrapping up, and analysts are already looking to next year, anticipating earnings will rise another 7% or so to around $126. And while stock prices have been hitting highs, volatility has dropped; the VIX is back down to 12 or so, indicating a fair amount of complacency, even as stocks hit highs. Commodity prices have been scraping the bottom of the barrel, with oil and gold near multi-year lows; one exception is cattle prices. Live-cattle futures last week hit an all-time high on CME, and prices are unlikely to come down anytime soon. In addition to increasing demand for beef, the recent drought in Texas and Oklahoma dented cattle herds, which has forced farmer to undergo a lengthy cattle replacement process. Stock market analysts aren’t the only ones looking to next year. The World Economic Forum is out with its new …

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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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