Financial Review

A Grain of Salt

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-02-05-2015.mp3Podcast: Play in new window | Download (Duration: 13:17 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 211 = 17,884 SPX + 21 = 2062 NAS + 48 = 4765 10 YR YLD + .02 = 1.82% OIL + 2.26 = 50.71 GOLD – 4.40 = 1265.50 SILV – .11 = 17.32   More people sought unemployment benefits last week, but the number of applicants remained near historic lows in a positive sign for job growth. The Labor Department says that weekly applications rose 11,000 to a seasonally adjusted 278,000. The four-week average, a less volatile measure, fell 6,500 to 292,750. That average has plunged 15 percent over the past 12 months.   Worker productivity declined in the fourth quarter of 2014, while labor costs increased. Productivity, the amount of output per hour of work, fell at 1.8 percent rate in the fourth quarter after rising at a 3.7 percent rate in the third quarter. Labor costs increased at a 2.7 percent rate in the fourth quarter after having fallen at a 2.3 percent rate in the third quarter. The drop in productivity and rise in labor costs are reflected in the fact that the growth in overall output slowed in the fourth quarter.   The U.S. trade deficit jumped 17.1% in December to a two-year high. The nation’s trade gap jumped to a seasonally adjusted $46 billion in December from a revised $39 billion in the prior month.   If Anthem is your …

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Financial Review

Lather, Rinse, Repeat

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-04-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 17 = 17,383 SPX – 5 = 2012 NAS – 15 = 4623 10 YR YLD – .01 = 2.34% OIL – 1.31 = 77.47 GOLD + 2.90 = 1169.20 SILV – .11 = 16.13 Election Day 2014! We should all be very, very happy. Forget about red and blue, we can all count our blessings because the campaign ads on radio and TV are going away. There is one redeeming thing about this whole election. It will be over in a few hours. Say hallelujah! Or you could say that it’s amazing that anyone bothers to vote given that our choices are between tweedle dumb and tweedle dumber. Still, I went to the polls today, early, and I cast my ballot. I was the only voter voting. In a few hours we’ll get the results. And the most likely result is that not much will change, despite the drama and despite hundreds of millions to persuade you. It takes a fortune for a politician to get beat these days, but most of the money isn’t real, it’s magic money that doesn’t belong to anybody, or at least nobody is willing to admit they spend money on politics. We’ve got the best politicians money can buy. The present split Congress is the least-productive in US history. Regardless of the election’s outcome, the 114th Congress is unlikely to be any more …

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Financial Review

Forget Complacency

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-13-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 223 = 16,321 SPX – 31 = 1874 NAS – 62 = 4213 10 YR YLD closed 2.28% OIL – .69 = 85.05 GOLD + 14.10 = 1238.10 SILV + .10 = 17.60 The major indices were up and then down; small moves earlier in the session; then, in the final hour stocks slipped and kept falling. The S&P 500 has fallen 6.8 percent from its Sept. 18 record, making this the worst pullback in two-and-a-half years. The Russell 2000 sank 4.7 percent last week. The small-cap index entered a correction after sliding more than 10 percent from an all-time high in March. The Dow Jones Industrial Average has dropped 5.5 percent from its record last month, while the Nasdaq Composite Index has slumped 8.3 percent from a 14-year high reached in September. The Volatility Index, or VIX, rose 13 percent today to 24, the highest level since June 2012. Forget complacency. The final hour collapse coincided with a report that an Emirates Airline plane in Boston was surrounded by medical crews and they removed five passengers over concerns about Ebola. But there is more to today’s trading than an Ebola scare. Oil prices continued to slide. Saudi Arabia is saying they are comfortable with oil prices in the sub-$90 range. The Saudis don’t necessarily want prices to slide further, but they are unwilling to shoulder production cuts unilaterally and …

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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, June 25, 2014 – Use Your Library Card at a Copy Shop for a Horseback Ride to the Moon

Use Your Library Card at a Copy Shop for a Horseback Ride to the Moon by Sinclair Noe   DOW + 49 = 16,867 SPX + 9 = 1959 NAS + 29 = 4379 10 YR YLD – .02 = 2.56% OIL + .74 = 106.77 GOLD – .60 = 1319.40 SILV + .09 = 21.12 One of the jobs of the Commerce Department is to calculate the gross domestic product of the country; clearly it is a difficult task to figure out the value of all the goods and services produced, and so they tend to revise the numbers as they gather information. In April the Commerce Department figured the economy grew, just barely, 0.1% in the first quarter; last month they revised their GDP numbers to negative1.0%; today they revised GDP even lower. The economy shrank by 2.9%.   To understand the big move, you first have to realize that the GDP number is supposed to measure everything; construction and demolition, marriages and divorces, broccoli sales and cigarette sales, yoga classes and cancer treatments. One of the big reasons for the negative number is that the cost of healthcare dropped significantly.   The US spent $6.4 billion less on health care in the first quarter than in the last quarter of 2013. Government statisticians initially forecast a 9.9% increase in health-care spending, and what we got was a 1.4% decline. Considering all the millions of previously uninsured people who are gaining access to health insurance under the Affordable …

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Thursday, April 03, 2014 – Tomorrow, Tomorrow, It’s Only a Day Away

Tomorrow, Tomorrow, It’s Only a Day Away by Sinclair Noe DOW – 0.45 = 16,572SPX – 2 = 1888NAS – 38 = 423710 YR YLD – .01 = 2.79%OIL + .73 = 100.35GOLD – 3.10 = 1287.80SILV – .16 = 19.92 Forget about today; at least in terms of Wall Street trading. Tomorrow is more important. The first Friday of each month is always a big day because of the monthly jobs report; tomorrow, maybe more than most. The consensus estimates called for 200,000 net new jobs in March and the unemployment rate is expected to drop to 6.6% from 6.7%. Then there is the whisper number. Many people believe the harsh winter weather has held back hiring, like a balloon trapped under water by a thin sheet of ice, and when the ice melts, as it did in March, the balloon will jump out of the water like a salmon swimming upstream. Weather sensitive industries such as retail, construction and manufacturing might be especially strong performers. A March jobs report that shows a broad increase in hiring across most or all industries would show the economy is recovering and everything, including the Fed, is on track. A disappointing number, though, would bolster the case of the increasingly famished Wall Street bears that bad weather alone is not the source of weak economic growth so far in 2014. And if the number comes in right at expectations, we’ll have to go to the tiebreakers. We will look at the number …

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Thursday, March 13, 2014 – White Smoke

White Smokeby Sinclair Noe DOW – 231 = 16,108SPX – 21 = 1846NAS – 62 = 426010 YR YLD – .07 = 2.65%OIL + .25 = 98.24GOLD + 3.90 = 1372.10SILV – .15 = 21.28 Let’s start with some economic news, and then we’ll get to today’s anniversary (yes, we have another one to talk about). The federal budget deficit narrowed in February, shrinking 5% from a year earlier as receipts jumped and spending only modestly rose. The shortfall was $194 billion for February, versus the $204 billion recorded in the same month a year ago. The deficit has been steadily improving in the past several years, dropping to $680 billion in fiscal 2013. Retail sales increased 0.3% from January to February; December to January sales were revised lower by 0.4%; sales were up 1.5% from February a year ago. Retail sales excluding gasoline increased by 2.2% on a year to year basis. Initial claims for unemployment benefits for the week ending March 8, decreased by 9,000 to 315,000. Since federal unemployment insurance expired on Dec. 28, an estimated two million Americans have missed out on the benefits. Today, a bipartisan group of Senators reached a deal to extend federal long-term unemployment insurance for 5 months. The deal would be distributed retroactively to when benefits ended in December. The cost of about $10 billion would be offset by some tricky accounting known as “pension smoothing”. The bill still needs to clear a Senate vote, probably in late March; then it …

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Thrusday, January 16, 2014 – The “It Could Be Worse” Victory Lap

The “It Could Be Worse” Victory Lap by Sinclair Noe DOW – 64 = 16,417SPX – 2 = 1845NAS + 3 = 421810 YR YLD – .04 = 2.84%OIL – .07 = 94.10GOLD + .70 = 1243.70SILV – .11 = 20.20 The number of Americans filing new claims for unemployment benefits fell for the second consecutive week last week; down 2,000 to 326,000. This might suggest that the December jobs report, which was a weak 74,000 jobs added, maybe that report was just a temporary slowdown. In a separate report, the Philadelphia Federal Reserve Bank said its business activity index rose to 9.4 points this month from 6.4 in December. Any reading above zero indicates manufacturing expansion in the region. In another report, the Labor Department said its Consumer Price Index increased 0.3% after being flat in November. In the 12 months to December, consumer prices accelerated 1.5%. A 3.1% increase in gasoline prices was mostly behind the spike in inflation last month. The increase in gasoline was the largest since June and followed a 1.6% fall in November. Food prices rose 0.1% for a third month. There is no wage inflation. Average hourly earnings adjusted for inflation fell 0.3% in December; and with the weakness in the labor market, there is very little chance of wage growth for quite some time. The Fed targets 2 percent inflation, although it tracks a gauge that tends to run a bit below CPI. And outgoing Fed Chairman Ben Bernanke says inflation is …

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Tuesday, January 07, 2014 – No Place Else To Go

No Place Else To Go by Sinclair Noe DOW + 105 = 16,530SPX + 11 = 1837NAS + 39 = 415310 YR YLD – .02 = 2.93%OIL + .46 = 93.89 GOLD – 6.00 = 1232.80SILV – .32 = 19.95 Had to happen, eventually I suppose; an up day on Wall Street. Traders waded through the snow and decided to buy something. No place else to go. You can look for a better explanation, but I think that sums it up: no place else to go. Maybe some folks think we’re in bubble territory in stocks. I don’t know. A couple of weeks ago, economist Robert Shiller wrote an article in the New York Times claiming we were near a bubble in housing. Being near a bubble and being in a bubble are very different. Shiller has a formula for stock valuations known as CAPE, which stands for cyclically adjusted price earnings ratio. For the past 60 years or so, the CAPE ratio has been around 18.3. If CAPE moves above this estimate of the mean, eventually it will “regress to the mean” and return to the long-term average. If CAPE rises excessively above the mean, then one can argue that a bubble exists in the stock market. Right now, CAPE is estimated to be 25. Maybe there will be a reversion to the mean by way of prices dropping or maybe there will be a reversion to the mean by way of earnings rising. Either way, the prices of …

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Thursday, November 07, 2013 – The Road Not Taken

The Road Not Taken by Sinclair Noe DOW – 152 = 15,593SPX – 23 = 1747NAS – 74 = 385710 YR YLD – .03 = 2.61%OIL – .51 = 94.29GOLD – 10.00 = 1308.60SILV – .14 = 21.77 Big story on Wall Street today was the Twitter IPO. I will now tell you everything you need to know about it in 140 characters or less. TWTR IPO 2day. Priced @ $26. Pop 2 $50. Close @ 44.90 up 72%. Market cap = $24 bil, earnings = < zero. Smooth not Facebook. #bubblicious Economic growth accelerated in the third quarter. Gross domestic product grew at a 2.8 percent annual rate, the quickest pace in a year, after expanding at a 2.5 percent clip in the second quarter. Inventories, however, accounted for a 0.8 percentage point of the advance made in the third quarter, as businesses restocked shelves, but the slowest expansion in consumer spending in two years suggested an underlying loss of momentum. Consumer spending expanded at a 1.5 percent rate, the slowest pace since the second quarter of 2011. It grew at a 1.8 percent rate in the April-June period. So, unless there is a surge in 4thquarter demand, we might see future production reduced to clear out inventories. The economy grew at a 1.8 percent rate in the first half of 2013, expect growth of around 1.5% for the fourth quarter. The private sector decelerated over the summer, providing less of a cushion for the government shutdown in October. …

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