Financial Review

Financial Review Market Scorecard 07-22-2014

  DOW + 61 = 17,113 SPX + 9 = 1983 NAS + 31 = 4456 10 YR YLD – .01 = 2.46% OIL – .17 = 104.42 GOLD – 4.70 = 1308.50 SILV + .04 = 21.07

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Financial Review

Curb Your Enthusiasm

  We start with a couple of economic reports. The National Association of Realtors reports existing home sales were up 2.6% in June to a seasonally adjusted rate of 5.04 million, compared to 4.91 million in May. Sales in June were 2.6% higher than last month, but were 2.3% below the June 2013 rate. Total inventory rose 2.2% in June to 2.3 million existing homes for sale; unsold inventory is up 6.5% from a year ago.   At June’s pace of sales, there was a 5.5 month supply of homes for sale. The Realtors’ group considers a 6-month supply to be a balanced market. Higher supplies favor buyers and lower supplies favor sellers. The Federal Housing Finance Agency says home prices in May rose 0.4% from the prior month and were 5.5% above their level of May 2013. Distressed sales accounted for just 11% of sales in June, down from 15% last year, 25% in 2012, and 30% in 2011. Fewer distressed sales probably explains why there were fewer sales than June of last year.   The Consumer Price Index, or CPI, measures inflation at the retail level; the CPI increased 0.3% in June. The core CPI looks at prices excluding food and energy, which is important for people who don’t eat food or drive cars or use electricity; core CPI was up 0.1% in June. On a year over year basis, CPI is up 2.1%, and the core CPI is up 1.9%. The big driver for the increase in …

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Financial Review

Financial Review Market Scorecard 07-21-2014

DOW – 48 = 17,051 SPX – 4 = 1973 NAS – 7 = 4424 10 YR YLD – .01 = 2.47% OIL + 1.46 = 104.59 GOLD + 1.30 = 1313.20 SILV + .04 = 21.03

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Financial Review

A Three Legged Stool

  First leg: Let’s start with earnings reporting season, which kicks into full gear this week with 140 of the S&P 500 companies posting results.   Netflix reported a profit of $71 million, or $1.15 a share, on revenue of $1.34 billion. This was in line with expectations, but for Netflix, an important component is how fast they are adding subscribers; turns out – pretty fast; 1.69 million new net streamers in the second quarter; 570,000 in the US and 1.12 million international subscribers; now topping 50 million worldwide.   Allergan, the Botox company, posted better than expected 2Q profits and sales but also announced it is cutting 1,500 jobs in a restructuring.  BB&T, the southeastern financial company, posted weak 2Q results as mortgage activity lagged; this has been a theme among banks for the second quarter, but the bigger banks have been compensating with profits in investment banking and trading; smaller, regional banks find it harder to compete in that arena. Chipotle Mexican Grill, theme park operator Six Flags, oilfield services company Halliburton, Manpower Group, and chip-maker Texas Instruments all reported better than expected results.   Tomorrow we’ll get the earnings report from McDonalds; after the close we’ll get earnings from Microsoft and Apple. Wednesday’s results include Facebook. Thursday we’ll hear from General Motors and Amazon.com.   So far, earnings season has been strong, of the S&P 500 companies that reported through the end of last week, earnings are up 7.6% from the same period last year on 4.2% …

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Financial Review

Financial Review Market Scorecard 07-18-2014

DOW + 123 = 17,100 SPX + 20 = 1978 NAS + 68 = 4432 10 YR YLD + .01 = 2.48% OIL – .31 – 102.88 GOLD – 7.30 = 1311.90 SILV – .27 = 20.99

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Financial Review

The Fault Is Not In Our Stars

07182014 Script The Fault Is Not In Our Stars by Sinclair Noe   DOW + 123 = 17,100 SPX + 20 = 1978 NAS + 68 = 4432 10 YR YLD + .01 = 2.48% OIL – .31 – 102.88 GOLD – 7.30 = 1311.90 SILV – .27 = 20.99 President Obama today demanded Russia stop supporting separatists in eastern Ukraine, calling it “an outrage of unspeakable proportions.” Obama stopped short of directly blaming Russia for the incident but warned that he was prepared to tighten economic sanctions. He echoed international calls for a rapid and credible investigation. While the West has imposed sanctions on Russia over Ukraine, the United States has been more aggressive than the European Union. German Chancellor Angela Merkel said it was too early to decide on further sanctions before it was known exactly what had happened to the plane. Emotions are undoubtedly running high across Europe, but whether that translates into action remains to be seen.   Meanwhile, Israel says it could significantly widen a Gaza land offensive. The Israeli land advance followed 10 days of barrages against Gaza from air and sea, hundreds of rockets fired by Hamas into Israel and failed attempts to arrange a ceasefire or a truce.   How does all this play out? We don’t know. Yesterday was a terrible day, with Israel sending in ground troops to Gaza and somebody shooting down a Malaysian jetliner; it felt like an inflection point, like a moment when the narrative shifts, but …

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Financial Review

Financial Review Market Scorecard 07-17-2014

DOW – 161 = 16,976 SPX – 23 = 1958 NAS – 62 = 4363 10 YR YLD – .06 = 2.47 OIL + 2.55 = 103.75 GOLD + 18.40 = 1319.20 SILV + .37 = 21.26

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Financial Review

Unleash the Hounds of War

  A Malaysian Airlines passenger jet, Flight 17, a Boeing 777, has crashed near the Ukrainian-Russian border; all 295 passengers are dead. US intelligence officials say the jetliner was shot out of the sky by a surface to air missile; they could not confirm who fired on the plane but it is believed the missile was launched by separatists in Ukraine or by Russian forces positioned across the border from the crash site.   Yes, more than four months ago, another Malaysia Airlines plane, Flight 370 from Kuala Lumpur to Beijing, disappeared with 239 people on board, and that plane remains lost, despite ongoing searches in the Indian Ocean. Flight 17 is believed to have had 280 passengers and 15 crew. Early reports indicate the passengers included 55 Dutch, 23 Americans, and 9 Britons.   The crash today involved a flight from Amsterdam to Kuala Lampur, but the flight went down in the Donetsk region of eastern Ukraine where pro-Russian separatists have been fighting Ukrainian forces for several months. The separatists denied responsibility. The separatists were quoted by the Russian news agency Interfax as saying that they had found the “black box” flight recorder. Other Russian reports said the rebels planned to call a three-day cease-fire to allow for an investigation.   Aviation authorities knew this was a dangerous area prior to today’s crash. Three months ago, the FAA prohibited US airlines and US pilots from flying over parts of Ukraine. Today several airlines re-routed flights. Ukrainian military planes have …

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Financial Review

Financial Review Market Scorecard 07-16-2014

DOW + 77 = 17,138 SPX + 8 = 1981 NAS + 9 = 4425 10 YR YLD – .01 = 2.53% OIL + 1.38 = 101.34 GOLD + 6.20 = 1300.80 SILV + .07 = 20.89

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Financial Review

The Color if the Day is Beige

  A record high close for the Dow; the 15th record high close of the year for the Dow. The S&P 500 did not take out the old high from July 3rd. We have a few economic reports to cover, plus Fed Chair Yellen continued testimony on Capitol Hill, and lots more.   Industrial production increased 0.2% in June to 103.9. This is 24.1% above the recession low, and 3.1% above the pre-recession peak. For the second quarter, industrial production advanced at an annual rate of 5.5%; so the quarter was good but the month of June was less than expected.   The Commerce Department reports producer prices increased by a seasonally adjusted 0.4% last month, above forecasts for a 0.2% gain, after falling 0.2% in May. Year-over-year, the producer price index rose at an annualized rate of 1.9% in June. The core rate, stripping out food and energy prices, was up 0.2%.   This afternoon, the Federal Reserve released its Beige Book, a collection of reports from the 12 Fed districts. The general consensus is that economic growth was moderate to modest. Most Districts were optimistic about the outlook for growth. Consumer spending increased in every district. Retail sales grew modestly in most districts. Auto sales, which have been on the upswing for more than a year, continued to stand out as particularly brisk support for the economy, but broader retail sales were more subdued. Labor market conditions continue to improve with all districts reporting slight to moderate employment …

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