Financial Review

Let Slip the Cats of War

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-28-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS08282014 Financial Review for Thursday LISTEN HERE DOW – 42 = 17,079 SPX – 3 = 1996 NAS – 11 = 4557 10 YR YLD – .03 = 2.33% OIL + .57 = 94.45 GOLD + 6.50 = 1290.20 SILV + .05 = 19.58 Since falling to a near three-month low on Aug. 7, the S&P 500 index had risen for 11 of the prior 14 sessions, pushing it above 2,000 for the previous two days. However, the new highs came on some of the lightest trading volume of the year. Markets don’t go up in a straight line. However, the big round numbers are usually bullish. Two weeks after the passing of such a big, round number, the S&P 500 averages a 1% gain and is positive 79% of the time. Three months later, the index averages a 3.6% gain and is positive 89% of the time. When the S&P 500 surpassed 1900 back in May, it rallied for another five straight days and nine of the next 10. This time, the sight of the big, round 2,000 mark got traders so excite, they just screwed it up right away. The Commerce Department has released its first revision of the second quarter GDP. Gross domestic product grew 4.2%, up from the initial reading of 4%. First quarter GDP was negative; the economy contracted by 2.1%. So, part of the second quarter growth reflects …

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Financial Review

Wednesday, August 27, 2014 – The Greater Depression

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-27-2018.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS08272014 Financial Review DOW + 15 = 17,122 SPX + 0.10 = 2000.12 (record) NAS – 1 = 4569 10 YR YLD – .03 = 2.36% OIL – .16 = 93.70 GOLD + 2.10 = 1283.70 SILV + .08 = 19.54 Any positive day for the S&P 500 means a new record high close; today was the 31st of the year. Volume was really, really light. This week the S&P 500 crossed above 2000, which would indicate the economy is strong; there are several economic indicators you could consider such as an abundance of corporate cash, a little more top line growth in the second quarter, and improved consumer confidence even if consumers haven’t found the cash to pay for things; but you also have the yield on the 10 year Treasury note dropping lower and lower, which would indicate the economy is weak. We are told the yield on Treasuries is low because of foreign buyers, and maybe Treasuries can be considered a global instrument; another possibility is that the deficit has been shrinking, meaning fewer new issuances…, still. Most divergences result in a reversion to the mean. So the big question is whether stocks come down or yields go up. The US budget picture will likely worsen in coming months as companies wait until next year to see what actions Congress will take on taxes. A report from the Congressional Budget Office …

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Financial Review

A Few Old Sayings

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-26-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS08262014 DOW + 29 = 17,106 SPX + 2 = 2000.02 (record) NAS + 13 = 4570 10 YR YLD + .01 = 2.40% OIL + .55 = 93.90 GOLD – .70 = 1280.90 SILV – .08 = 19.38 The S&P 500 notched its 30th record of the year and closed above 2000 for the first time ever. The Dow also rose but fell short of its record closing high after setting an all-time intraday high earlier in the session. There are a few old sayings about the market that seem to fit. The first is, “the trend is you friend”; we have seen a few minor pullbacks since the bottom in 2009, but since the start of 2013 there has been a strong and steady uptrend. “A trend in place is more likely to continue than it is to reverse, until it reverses” and today marked a continuation of the trend, not a reversal. Why is the market going up? Who knows? There are plenty of problems around the world. The US economy looks sluggish, but “stocks climb a wall of worry to march into bullish territory”; that’s a phrase that’s been thrown around for more than 60 years, but was made popular by Joe Granville in the 1980s. Another financial proverb claims “Worry is interest paid on trouble before it falls due.” And the opposite of the “wall of worry” is “Bear …

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Financial Review

Tax Weasels

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-25-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS08252014 Tax Weasels by Sinclair Noe LISTEN HERE DOW + 75 = 17,076 SPX + 9 = 1997.92 (record) NAS + 18 = 4557 10 YR YLD – .02 = 2.38% OIL – .27 = 93.38 GOLD – 4.60 = 1277.20 SILV – .05 = 19.45 The S&P 500 crossed above 2000 intraday, closing off the high for the day, but still closing in record territory. We recognize it but we don’t have a big celebration. It’s just a number, a nice big round number. For reference, the S&P 500 topped 1,000 back in February 1998. Economic data today includes: Sales of new single family homes dropped for a second month in June. New home sales slipped 2.4%, but data from the past 3 months was revised to show 33,000 more new homes were sold than previously reported. The median sales price increased 2.9% from a year ago. At July’s sales pace it would take 6.0 months to clear the supply of houses on the market, the highest since October 2011. Tomorrow, we’ll see the latest data on existing home sales from S&P/Case-Shiller. Separately, financial data firm Markit said its preliminary services Purchasing Managers Index dipped to 58.5 this month from 60.8 in July.A reading above 50 indicates expansion. Last Friday ECB President Mario Draghi delivered the luncheon speech at the Jackson Hole Symposium; Draghi said the ECB had done all it could for …

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Financial Review

Be Careful Out There

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1_2-08-22-2014.mp3Podcast: Play in new window | Download (Duration: 20:28 — 9.4MB)Subscribe: Apple Podcasts | Android | RSS08222014 LISTEN HERE DOW – 38 = 17,001 SPX – 3 = 1988 NAS + 6 = 4538 10 YR YLD un = 2.40% OIL – .46 = 93.50 GOLD + 4.30 = 1281.60 SILV un = 19.51 All three major indices posted gains for the week, with the Dow up 2%, the S&P up 1.7% and the Nasdaq up 1.6%. It was the strongest week of gains for both the Dow and the S&P since April, and the third straight week of gains for all three indices. There is a lot to cover before we can wrap up the week. First we go to Jackson Hole Wyoming, where the Fed has been having a friendly get together of economists. Janet Yellen kicked off the event with a speech this morning. She said what you might expect: “There is no simple recipe for appropriate policy,” and she called for a “pragmatic” approach that gives officials room to evaluate data as it arrives without committing to a preset policy path. And she backed up her comments with a new tool, the Labor Market Conditions Index, which measures 19 labor market indicators, and it isn’t new data, just combining it all together, but it showed she is monitoring the data. Yellen referenced the possibility that labor markets may be a bit tighter than they seem and that the Fed may consider having to raise interest rates …

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Financial Review

Rarified Air

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-21-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS08212014 DOW + 60 = 17,039 SPX + 5 = 1992 NAS + 5 = 4532 10 YR YLD – .02 = 2.40% OIL + .45 = 93.90 GOLD – 15.10 = 1277.30 SILV – .04 = 19.52 The S&P 500 broke two records during today’s session, climbing past its previous intraday all-time high of 1,991.39 and ending above its previous record close of 1,987.98. Both had been set on July 24. Family Dollar has rejected a $9 billion dollar buyout offer from Dollar General, opting instead for a smaller $8.5 billion dollar offer from Dollar Tree. The thinking is that a combination of the largest dollar store – Dollar General with the #2 Family Dollar, would be unlikely to win antitrust approval. Once upon a time, Sears was the largest retailer in the nation. Today, Sears Holdings announce it lost $975 million in the first half of the year; $573 million in the second quarter. This was the 9th consecutive quarter of losses, and the past quarter also marked the heaviest losses. Quarterly revenue dropped about 10%. The plan now is to close underperforming stores, or, in a classic example of corporate-speak “rationalizing our physical footprint.” The company successfully spun off Lands End earlier this year, to the benefit of shareholders. But its Sears Canada and Sears Automotive stores have been on the block for some time, indicating either a lack of interest …

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Financial Review

Sunlight is the Best of Disinfectants

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-20-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS08202014 DOW + 59 = 16979 SPX + 4 = 1986 NAS – 1 = 4526 10 YR YLD + .02 = 2.42% OIL + .63 = 93.49 GOLD – 3.80 = 1292.40 SILV + .04 = 19.55 No economic reports today, but the Federal Reserve released the minutes of the July 29-30 FOMC meeting. You will recall that the Fed left interest rates unchanged and continued the taper by reducing large scale asset purchases by $10 billion a month, with the plan to end purchases by October. The Fed had said in its policy statement following the July meeting that there was “significant” labor market slack, but the minutes showed many members of its policy-setting panel thought this characterization “might have to change before long.” Most Fed officials wanted further evidence the labor market and the economy were showing significant improvement before changing their view on raising rates, but they said, “Labor market conditions had moved noticeably closer to those viewed as normal in the longer run,” and policymakers “generally agreed” the job market was healing faster than they had expected. Most Fed policymakers felt any change in their view on when to start raising rates “would depend on further information on the trajectories of economic activity, the labor market and inflation.” Well, we got more data yesterday showing that inflation is not a problem yet; so that leaves economic activity and the …

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Financial Review

Theory and Instinct; Nobody Knows

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-19-2014.mp3Podcast: Play in new window | Download (Duration: 13:14 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSOver the weekend, the geopolitical hotspots did not explode. Kurdish forces made progress against ISIS militants in Iraq; Ukrainian forces made progress against pro-Russian separatists in eastern Ukraine.

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Financial Review

Financial Review Market Scorecard 08-19-2014

DOW + 80 = 16,919 SPX + 9 = 1981 NAS + 19 = 4527 10 YR YLD+ .02 = 2.40% OIL (sept) = 94.48 GOLD – 2.00 = 1296.20 SILV – .18 = 19.50 Check out this episode!

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Financial Review

It’s Just a Matter of Time

  The consumer price index rose a seasonally adjusted 0.1% in July. Food prices rose 0.4%, but energy costs declined 0.3%; the first drop in energy prices since March. Consumer prices have risen an unadjusted 2% over the past 12 months, down slightly from June. Prices surged in the early spring but have since tapered off. Excluding volatile food and energy prices, the core rate has risen 1.9% in the same span, unchanged from the prior month. Almost all of the increase in consumer prices can be traced back to housing costs, or shelter prices; over the past year, shelter prices are up 2.9%.   Hourly wages have risen about 10% overall since June 2009, to $24.45 an hour. But over the same span they’ve slipped 0.3% in “real” or inflation-adjusted terms. Since the Great Recession ended five years ago, the amount of money Americans earn each hour after adjusting for  inflation has actually fallen. And that largely explains why the economy is growing so slowly.   The Federal Reserve should be in no hurry to raise interest rates because there is no serious threat from inflation, at least not now.   According to the US Travel Association and GfK, a market research firm, you might not take a vacation this year. About 40% don’t plan on using all of our paid time off. The share of American workers taking vacation is at historic lows. In the 1970s, about 80 percent of workers took a weeklong vacation every year. Now, …

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