Financial Review

How Low Did We Go

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-09-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 138 = 17,995 SPX +8 = 2079 NAS + 15 = 4942 10 YR YLD – .05 = 2.20% OIL – 26 = 50.00 GOLD – 1.80 = 1167.90 SILV – .20 = 15.83   “How Low Can Stocks Go?” That was the headline in the Wall Street Journal 6 years ago. The Dow was still slogging through 4 straight weeks of losses to close at 6547. The S&P 500 was at a 12 year low of 676. The Nasdaq Composite closed at 1268.   Not many people called it at the time. A few did. John Bogle called it 2 weeks early. Barack Obama called it 5 days early. Mark Haines called it one day late. Of course, after all four tires go flat you might not make the prediction that there will be a fifth flat tire. Nobody was really confident about a bottom until about the end of the year. The current bull market is the fourth-longest on record; it’s also the fourth strongest. When will the bull market end? No idea. I could call the end of the bull market every day, and one day I would be right but that would be a waste off time for all of us.   For now, we have a nice bounce from the sell-off on Friday. Friday we learned the economy added 295,000 jobs last …

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Financial Review

Jobs Report Friday

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-06-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 278 = 17,856 SPX – 29 = 2071 NAS – 55 = 4927 10 YR YLD + .13 = 2.24% OIL – 1.02 = 49.74 The first Friday of the month is all about jobs. The Bureau of Labor Statistics reports the economy added 295,000 new jobs in February. The unemployment rate dropped from 5.7% to 5.5%. The results topped estimates of 235,000 jobs, and also beats the revised 239,000 reported for January (revised down from 257,000); and also up from 188,000 a year ago.   The estimates were lower, mainly because most of the country has been experiencing harsh winter weather, and on the West Coast there was a shutdown and a slowdown at the ports. None of that seemed to matter, and if you are thinking ahead, you might imagine that the economy will just keep getting stronger as the weather gets better.   Now, you might look at how Wall Street responded to this very good news about jobs and you might be scratching your head, you might even think Wall Street is opposed to honest, hardworking Americans. Well, maybe a little, but the reason for the sell-off is that a stronger economy means higher interest rates. Investors are looking and focusing entirely on what the Federal Reserve will do in the coming months. Effectively good news in this data point supports the notion …

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Financial Review

Sparks Turn into Flames

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-05-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 38 = 18,135 SPX + 2 = 2101 NAS + 15 = 4982 10 YR YLD – .01 = 2.11% OIL – .59 = 50.94 GOLD SILV   Productivity in the fourth quarter fell at a revised 2.2% annual pace. The Labor Department originally estimated that productivity fell 1.8% in the final three months of 2014.   The number of people who applied for new unemployment benefits climbed by 7,000 to 320,000 for the week ended February 28. New applications for unemployment benefits are 1.5% below year-ago levels.   Of course the big economic news is tomorrow morning when we get the monthly jobs report. A month ago, the report showed the economy added 257,000 net new jobs in January. The estimate for February is 235,000 new jobs. It would be a bit of a surprise if the number is stronger than expected. Earlier in the week the ISM report showed employment was still expanding, but at a slower pace; they cited the West Coast port slowdown. Meanwhile, the rest of the country has experienced bad weather in February. Overall, the labor market looks to be improving, slowly.   Last month, Walmart made headlines by announcing it would be hiking wages for a significant chunk of its hourly workforce, boosting its minimum hourly rate to $10 by next year. What was behind the move? Yesterday’s Beige Book may provide a clue. The report says …

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Financial Review

Sometimes Brazenly

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-04-2015.mp3Podcast: Play in new window | Download (Duration: 13:14 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 106 = 18,096 SPX – 9 = 2098 NAS – 12 = 4967 10 YR YLD un = 2.12% OIL + 1.26 = 51.78 Private-sector employment gains continued in February but at a slower pace than in the prior month. Automatic Data Processing Inc. reported Wednesday that employers added 212,000 jobs last month. On Friday, we’ll get the non-farm payroll report for February; it is expected the economy added about 235,000 jobs last month.   The Congressional Budget Office estimates the Treasury Department will exhaust its capacity to borrow in October or November if the debt limit isn’t raised. The debt limit is suspended until March 15. After that date, so-called extraordinary measures available to the Treasury to keep borrowing include deferring new investments in federal retirement and disability funds.   The U.S. Supreme Court is considering the fate of Obamacare for the second time in three years, weighing an attack on tax credits designed to help millions of people afford insurance. The Court heard arguments today in the case of King v. Burwell, an appeal by four Virginia residents who would block the subsidies in at least 34 states. The fight centers on a four-word phrase that has become a linchpin of the law. The measure says people qualify for tax credits when they buy insurance on an online marketplace “established by the state.” The challengers …

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Financial Review

The Lights Are On

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-03-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 85 = 18,203 SPX – 9 = 2107 NAS – 28 = 4979 10 YR YLD + .04 = 2.12% OIL + 1.00 = 50.59 GOLD – 2.40 = 1204.50 SILV – .13 = 16.33   Just a few economic reports today.   Corelogic reports home prices jumped 1.1% in January to take the year-over-year gain to 5.7%. CoreLogic said 27 states and the District of Columbia are at or within 10% of their peak.   The Thomson Reuters/PayNet Small Business Lending Index fell to 120.9 from an upwardly revised December reading of 133.5.  Small businesses cut back on borrowing. Cold weather may be part of the reason.   Car companies reported February sales figures. Ford Motor sales dropped 2%. Ford was projected to report a 5.8% increase in sales but deliveries of F-Series pickups, Escape sport-utility vehicles and Fusion family cars all declined last month. General Motors sales rose 4.2 percent but they still fell short of estimates as sales of light trucks rose and sedans fell. Toyota, Fiat Chrysler, Honda and Nissan all reported deliveries that increased less than analysts had estimated. Industry-wide, the annualized selling rate, adjusted for seasonal trends, rose to 16.2 million cars and light trucks, from a 15.4 million pace a year earlier.   Chief executives of large U.S. companies see the economy accelerating modestly in 2015. According the Business Roundtable’s first-quarter …

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Financial Review

Holy Grail

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-02-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 155 = 18,288 SPX + 12 = 2117 NAS + 44 = 5008 10 YR YLD + .08 = 2.08% OIL + .06 = 49.82 GOLD – 7.80 = 1206.90 SILV – .22 = 16.46   February was the best month for stocks since October 2011. The S&P 500 gained 5.5% in February. March is off to a fine start. The Dow Industrial Average closed at a record high. The S&P 500 closed at a record. The Nasdaq Composite hit 5000 for the first time in 15 years. And if you wonder why we celebrate when the indices hit records, it is because 15 years ago we didn’t know it would take 15 years to get back to these levels.   Earnings season is pretty much over and it wasn’t all that pretty. With 485 of 500 S&P 500 companies reporting, FactSet says the blended growth rate is only 3.7%. Without Apple that number shrinks to only 2% but then again if you take out energy, it balloons to nearly 7%. Estimates have been revised lower, which is typical; companies try to ratchet down expectations, but this is different. All sectors are showing expectation deterioration, not just energy.   Earnings growth has slowed, and valuations are a little on the pricey side, and expectations are down. So, why are stocks at record highs? Well, start with the idea that …

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Financial Review

Live Long and Prosper

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-02-27-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 81 = 18,132 SPX – 6 = 2104 NAS – 24 = 4963 10 YR YLD – .01 = 2.00% OIL + 1.03 = 49.20 GOLD + 4.50 = 1214.70 SILV + .04 = 16.67   We are wrapping up the first 2 months of trading. January was a down month for stocks, but February turned positive, with record high closes posted for the Dow, the S&P 500 and the Russell 2000. The Nasdaq went almost entirely green for the month, closing in on 5000, and actually setting a new monthly closing high, taking out the March 2000 monthly close of 4572.   For the month, the Dow Industrial Average gained 5.6%, the S&P 500 gained 5.5% and the Nasdaq added 7.1%, and the Russell 2000 added 5.8%. Year to date, , Dow Jones Industrial Average +1.7% YTD, S&P 500 +2.2% YTD, Nasdaq Composite +4.8% YTD,  and the Russell 2000 +2.4% YTD,   Junk bonds are poised to deliver gains of 2.3% for February, the best monthly result since 2013, while investment-grade debt has registered losses. Investors are also returning to the equity markets, with the MSCI All-Country World Index touching a record Thursday after two losing months. Markets in Germany, the United Kingdom and Sweden hit all-time highs. Japan, the poster child of deflation, saw its stock index reach its highest point in 15 years. This …

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Financial Review

Neutrality Matters

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-02-26-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 10 = 18,214 SPX – 3 = 2110 NAS + 20 = 4987 10 YR YLD + .05 = 2.01% OIL – 2.01 = 48.98 GOLD + 5.00 = 1210.20 SILV – .01 = 16.63   The Federal Communications Commission has voted to regulate broadband Internet service as a public utility. Tom Wheeler, the commission chairman, said the FCC was using “all the tools in our toolbox to protect innovators and consumers” and preserve the Internet’s role as a “core of free expression and democratic principles.”   The new rules, approved 3 to 2 along party lines, are intended to ensure that no content is blocked and that the Internet is not divided into pay-to-play fast lanes for Internet and media companies that can afford it and slow lanes for everyone else. Those prohibitions are hallmarks of the net neutrality concept.   Mobile data service for smartphones and tablets, in addition to wired lines, is being placed under the new rules. The order also includes provisions to protect consumer privacy and to ensure that Internet service is available for people with disabilities and in remote areas.   The FCC is taking this big regulatory step by reclassifying high-speed Internet service as a telecommunications service, instead of an information service, under Title II of the Telecommunications Act. The Title II classification comes from the phone company era, treating service as a public …

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Financial Review

Milk and Cookies. Enjoy While You Can.

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-02-25-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 15 = 18,224 SPX – 1 = 2113 NAS – 0.98 = 4967 10 YR YLD – .02 = 1.97% OIL + 1.75 = 51.03 GOLD + 2.90 = 1205.20 SILV + .22 = 16.64   Another record high for the Dow Industrial Average. These are the days of milk and cookies.   Federal Reserve Chairwoman Janet Yellen continued her semi-annual Humphrey-Hawkins testimony today in front of the House Financial Services Committee. The prepared opening remarks were identical to the testimony yesterday in the Senate. The Q&A session became a bit testy today as Yellen was accused of political bias. Republicans questioned Yellen about an October speech on inequality, just before the midterm elections, as evidence she was leaning toward the Obama administration and Democrats. Methinks they doth protest too much. There were also calls for an audit of the Fed, historically a nonstarter with Federal Reserve Chairs. It made for generally poor political theater.   The important part of the testimony was fairly easy to find. Keep in mind the Fed has a dual mandate of maximum employment and price stability. So the key statement from Yellen was when she said: “Provided that labor market conditions continue to improve and further improvement is expected, the Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when, on the basis of …

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Financial Review

Gulliver’s Travels

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-02-24-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 92 = 18,209 SPX + 5 = 2115 NAS + 7 = 4968 10 YR YLD – .07 = 1.99% OIL – .29 = 49.16 GOLD – .50 = 1202.30 SILV – .01 = 16.41   The Dow Industrials and the S&P 500 hit record high closes. The Nasdaq rose for the tenth straight session, its longest streak since July 2009. The Russell 2000 Index of small cap stocks closed at a record 1233.   Fed Chair Janet Yellen testified today before the Senate banking committee in her semi-annual report on monetary policy. Yellen said the Fed is preparing to consider interest rate hikes “on a meeting-by-meeting basis.” Yellen described how the Fed’s rate-setting policy committee will likely proceed in coming months: first by removing the word “patient” in describing its approach to rate hikes, then entering a phase in which rate hikes are possible at any meeting. That approach could open the door to an interest rate increase as early as June, but short-term rate futures contracts showed traders had shifted their expectations of an initial rate hike from September to October. And the yield on the ten year Treasury note slipped down below 2%. So, the markets players are placing their bets.   Yellen said she felt labor markets and other key economic indicators “have been increasing at a solid rate.” However, she said she still feels the …

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