Financial Review

War, Inversions, and Climate

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-23-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 116 = 17,055 SPX – 11 = 1982 NA – 19 = 4508 10 YR YLD – .03 = 2.53% OIL + .06 = 91.62 GOLD + 8.10 = 1223.90 SILV + .05 = 17.88 First up: war. You’ve probably heard by now that the US launched several airstrikes against ISIS targets inside Syria and, separately, in potentially averting an imminent threat to the homeland from an al Qaeda group called Khorasan. Many of the targets were in and around Raqqa, Syria, believed to be an ISIS stronghold. Several Arab nations took part in the US-led operation: Jordan, Saudi Arabia, Bahrain, Qatar and the United Arab Emirates. A spokesman for the Pentagon said they are still assessing the effectiveness of the bombing campaign but the Pentagon believes they were “successful in hitting what we were aiming at.” The airstrikes against Khorasan was in response to threats, however officials so far have provided no details about the terrorists’ planned attack or the credibility of the intelligence they had on it. A Pentagon spokesman said “the individuals plotting and planning it were eliminated.” The Syrian government says the US told it of plans to carry out airstrikes. The State Department immediately denied that it gave prior notification. Reuters reports Iranian officials were informed of the airstrikes in advance, but not specific targets. Meanwhile, the Israeli military said that it had shot down …

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Financial Review

Keep Your Eye On The Ball

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-22-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 107 = 17,172 SPX – 16 = 1994 NAS – 52 = 4527 10 YR YLD – .02 = 2.57% OIL – .91 = 91.50 GOLD – 1.40 = 1215.80 SILV – .06 = 17.83 It’s not a huge week for reports, but we do get a couple worth keeping an eye out for. On Thursday, we’ll get the durable goods report for August; and on Friday, we’ll get the third and final revision to second-quarter Gross Domestic Product. This morning we saw the report on existing home sales. The National Association of Realtors said existing home sales dropped 1.8 percent to an annual rate of 5.05 million units. The decrease was the first in four months, although the sales pace was still the second highest for the year. Investors had propped up the market by snapping up distressed properties and converting them into rental units, but last month they accounted for only 12 percent of transactions, which was the smallest share since November 2009; all cash sales made up 23 percent of transactions in August. First-time buyers accounted for 29 percent of sales, well below the 40% to 45% considered normal. The inventory of unsold homes on the market increased 4.5 percent from a year-ago to 2.31 million in August. At August’s sales pace, it would take 5.5 months to clear houses from the market, unchanged from July. A …

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Financial Review

Hot, Hot, Hot

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-19-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS09192014 Financial Review DOW + 13 = 17,279 (record) SPX – 0.96 = 2010 NAS – 13 = 4579 10 YR YLD – .04 = 2.58% OIL – .61 = 92.46 GOLD – 8.60 = 1217.20 SILV – .73 = 17.89 The Dow Industrials posted the 18th record high close of the year. The big story on Wall Street today was the Alibaba IPO. You’ve probably never heard of Alibaba, so here is a quick update. Alibaba is China’s biggest online marketplace, and it combines online shopping with online banking, and a search engine. It is the world’s most popular online shopping site; it’s even bigger than eBay and Amazon combined. As a search engine, it goes up against Google and Microsoft’s Bing. It also provides financial services; you could buy certain things using AliPay, so it competes with the new Apple Pay, and it even has its own money market fund with $87 billion in assets; so it’s kind of like a bank. The company was founded in China 15 years ago by an English teacher named Jack Ma, who is now the richest man in China, with personal net worth over $20 billion. Early investors include Yahoo, with a 16% stake in the company; and Softbank, with a 32% stake. You might think it was a good day for Yahoo; not so much. Yahoo sold 120 million BABA shares, keeping more than …

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Financial Review

Brilliance in Euphemistic Ambiguity

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-18-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 109 = 17,265 SPX + 9 = 2011 NAS + 31 = 4593 10 YR YLD + .03 = 2.63% OIL – 1.40 = 93.02 GOLD + 1.60 = 1225.80 SILV un = 18.62 Stock moved higher for a third day. Record high closes for the Dow and the S&P 500. The Dow notched its 17th record close of the year; the S&P posted its 34th record high close for the year. The stock market is in Fed mode. The Fed wrapped up their policy meeting yesterday, and they didn’t scare anybody; they even gave added assurance that they will be overly communicative. Interest rates are probably going to go up in the future but not at any specific time that can be identified. The Fed stuck with the phrase “considerable time” which is a great way to speak words that contain absolutely no meaning. Brilliant, brilliant performance in euphemistic ambiguity. And even if the Fed tightens, the rest of the world’s central banks are getting looser, and it just figures that some of that will spill over to Wall Street. The ECB lowered rates so much that they’ve gone negative. Just the other day, the People’s Bank of China pumped about $80 billion into five banks. The number of investment advisors that are bearish is at the lowest level since 1987. When bears start to dwindle to extremely low …

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Financial Review

Incredibly Orwellian Record High

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-17-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 24 = 17,156 SPX + 2 = 2001 NAS + 9 = 4562 10 YR YLD + .01 = 2.60% OIL – .90 = 93.98 GOLD – 11.70 = 1224.20 SILV – .16 = 18.62 The Dow Jones Industrial Average closed at a record high of 17,156.85; the first record high for the Dow since July. The Dow set an all-time intraday high of 17,221.11. It was the sixteenth record close for the blue chip index in 2014. The stock market action today was focused on the Federal Reserve. I suppose we could say the same thing about the past 6 years. Today, the Federal Reserve wrapped up its FOMC meeting. The FOMC stands for Federal Open Market Committee, which sounds incredibly Orwellian. The meeting was a rousing success; we know this because the media coverage can’t quite figure out whether the Fed will raise interest rates sooner or later, or whether the economy is weaker or stronger. While the much analyzed phrase “considerable time” remained in the FOMC statement, the newly announced scheme for interest rate normalization shows that higher rates are in the cards. The FOMC also said labor market conditions improved but a significant amount of slack remains. The Fed said it would end the bond-buying program known as quantitative easing in October. The Fed will purchase $15 billion of mortgage and Treasury bonds in October and …

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Financial Review

No Expectations

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-16-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 100 = 17,131 SPX + 14 = 1998 NAS + 33 = 4552 10 YR YLD un = 2.59% OIL + 1.79 = 94.71 GOLD + 2.20 = 1235.90 SILV + .03 = 18.79 Tomorrow the Federal Reserve FOMC wraps up its meeting to determine monetary policy. Even before the Fed issues a statement, the financial press is dissecting every phrase and utterance of every Fed policymaker, and trying to impart conflated significance to every twitch of an eyebrow or overstuffed briefcase. It’s pretty simple really; not much has changed over the past couple of months; the Fed is on track to end the large scale asset purchases under QE; the Fed will raise rates at some point, unless something drastic changes; the nuances of language are inconsequential. There, I’ve just condensed about 100 articles into about 100 words, and you didn’t miss anything. You’re welcome. Today, China jumped on the QE bandwagon. The People’s Bank of China will print about 500 billion yuan, which works out to about $81 billion. They will hand out the money to the five largest banks in China. That money will eventually make its way into the financial markets. Considering the cost of printing 500 billion yuan…, US producer prices were flat in August. The Labor Department said falling gasoline and food prices restrained its producer price index for final demand last month. The …

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Financial Review

It’s Just a Matter of Time

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-15-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 43 = 17,031 SPX – 1 = 1984 NAS – 48 = 4518 10 YR YLD – .02 = 2.59% OIL – .17 = 92.75 GOLD + 4.40 = 1233.70 SILV + .04 = 18.76 The Nasdaq just went south today; it was the worst day since July. I’m not sure there is a good explanation, but some of the excuses were entertaining. One idea is the Alibaba IPO is causing traders to rotate from certain stocks in preparation. Yea, sure. The Federal Reserve FOMC is meeting this week to determine monetary policy. We know the Fed is headed toward the end of QE next month; they are on track to end their massive purchases of mortgage backed securities and Treasuries; they will probably issue some guidance, or hints about when they will raise the target on interest rates. The general expectation is that the federal funds rate will go from near zero to 3.5% by the end of 2017, with the first increases in about 6 to 9 months. The two day FOMC meeting concludes Wednesday; the FOMC will issue a statement and then Janet Yellen will hold a press conference. Also Wednesday, the Fed’s economic forecasts will for the first time offer estimates for growth, unemployment, inflation and interest rates in 2017. New projections will also be given for 2014, 2015 and 2016. The data will offer some …

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Financial Review

The Brute Economic Power of Oil

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE_SEG_1-09-12-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 61 = 16,987 SPX – 11 = 1985 NAS – 24 = 4567 10 YR YLD + .08 = 2.61% OIL – .58 = 92.25 GOLD – 11.90 = 1229.30 SILV – .06 = 18.71 For the week, the Dow was down 0.9%, the S&P 500 was down 1.1% and the Nasdaq was down 0.3%. Let’s start with the economic data: Business inventories rose 0.4 percent in July vs a 0.8% rise in business sales that keeps the stock-to-sales ratio unchanged at a healthy and lean 1.29. In a separate report, retail sales and consumer sentiment pointed at an improving economy. The preliminary September reading on the University of Michigan/Thomson Reuters consumer-sentiment index rose to the highest level since July 2013 and topped consensus expectations. Sales at US retailers rose in August by the largest amount since April, sales were up 0.6%; raising confidence in the economic outlook for the second half of the year. Retail sales would have been higher, but the price of gas dropped; after excluding gasoline, spending rose 0.7% in August. Of course, one of the reasons Americans spent more money going out and eating and shopping is because the price of gasoline has been low. Spending at gas stations declined an estimated 0.8% in August. That followed a flat July and another 0.8% drop in June. A separate report from the Labor Department on Friday …

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Financial Review

We Have Met the Enemy

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_09-11-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 19 = 17,049 SPX + 1 = 1997 NAS + 5 = 4591 10 YR YLD – .01 = 2.53% OIL + 1.38 = 93.05 GOLD – 8.80 = 1241.20 SILV – .27 = 18.77 I’m fairly certain that at some point during this day you have taken at least a moment to recall where you were 13 years ago, how you heard the news, how you responded to the news. Maybe you can recollect specifics or maybe some of the memories have faded in time. What you knew exactly 13 years ago is probably quite different than what you know today. Last night I watched the president announce another war; this one will be different than the last one; so we are told. The plan is to expand the airstrikes against ISIS and take the fight to their base in Syria. It is no longer just about protecting American embassies and limited humanitarian efforts. The new plan is open-ended, and will likely be long-term. We won’t have combat troops on the ground, but we will have troops in Iraq; about 1600 US troops; I’m fairly certain they are capable of combat if pushed. Boots on the ground combat will come from Iraqi forces and Syrian rebels, apparently. House Speaker John Boehner says the country should unite behind the administration, even if we don’t know all the details of the …

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Financial Review

Timing is………..Everything

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-10-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 54 = 17, 068 SPX + 7 = 1995 NAS + 34 = 4586 10 YR YLD + .03 = 2.53% OIL – 1.13 = 91.67 GOLD – 6.80 = 1250.00 SILV – .12 = 19.04 Later today, at 6PM local time or 9PM eastern, President Obama will address the nation and lay out his strategy to degrade and destroy the Islamic State insurgency operating in Iraq and Syria. This will likely involve significant escalation of the US military role in the area, but we aren’t sure about the intervention in Syria; probably a combination of airstrikes, and support for more moderate Syrian forces willing to carry out attacks on both ISIS and Assad; along with regional allies providing on the ground support. The president has pledged there will not be boots on the ground. He said: “This is not the equivalent of the Iraq war. What this is similar to is the kinds of counter-terrorism campaigns that we’ve been engaging in consistently over the last five, six, seven years.” Which sounds like a distinction without a difference. Earlier today an administration spokesman said: “The president will discuss how we are building a coalition of allies and partners in the region and in the broader international community to support our efforts, and will talk about how we work with the Congress as a partner in these efforts.” That doesn’t mean …

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