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Thursday, September 26, 2013 – The Quotas Must Be Filled

The Quotas Must Be Filled by Sinclair Noe DOW + 55 = 15,328SPX + 6 = 1698NAS + 26 = 378710 YR YLD + .03 = 2.64%OIL + .20 = 102.86GOLD – 9.30 = 1324.80SILV – .07 = 21.83 A couple of economic reports this morning with conflicting signals. The National Association of Realtors said its Pending Homes Sales Index, based on contracts signed last month, decreased 1.6 percent. At the same time, labor market data was more positive. Initial claims for state unemployment benefits dropped 5,000 last week to a seasonally adjusted 305,000. And a little bit of research from the Atlanta Fed’s macroblog that you probably didn’t see; they report the pace of research and development (R&D) spending has slowed. The National Science Foundation defines R&D spending as “creative work undertaken on a systematic basis in order to increase the stock of knowledge” and application of this knowledge toward new applications. R&D spending is often cited as an important source of productivity growth within a firm, especially in terms of product innovation. But R&D is also an inherently risky endeavor, since the outcome is quite uncertain. On top of that, the federal funding of R&D activity remains under significant budget pressure. In the Countdown to the Shutdown, the Senate is expected to pass a government spending bill and send it back to the House of Representatives on Saturday, minus the defunding of Obamacare; the bill would be a so-called “clean” spending bill, dealing with spending and nothing else. House Speaker …

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Tuesday, July 23, 2013 – Woman Gives Birth to a Baby

Woman Gives Birth to a Baby by Sinclair Noe DOW + 22 = 15,567SPX – 3 = 1692NAS – 21 = 3579 10 YR YLD + .02 = 2.51%OIL + .09 = 107.00 GOLD + 12.50 = 1348.70SILV – .05 = 20.59 The Dow Industrial Average hit a new record high close. The S&P 500 was down slightly after four straight gains, including a record high yesterday. It’s still earnings reporting season, and the big report today came after the close of trade. Apple reported better than expected sales and profits. Generally, we’re seeing revenues are coming in pretty lackluster and profits seem to be doing a little better than gains in sales. In the first quarter of 2013, we saw an interesting and unexpected development. While the corporate earnings of S&P 500 companies were better than expected, their revenues weren’t nearly as impressive.  Just 46% of S&P 500 companies reported revenues above estimates. And the second-quarter corporate earnings might be similar, if not worse. Keep in mind that before second-quarter earnings season began, we had 87 S&P 500 companies issue negative earnings guidance. The information technology and consumer discretionary sectors of the S&P 500 had the largest number of companies issuing negative guidance about their corporate earnings relative to their five-year average. Many stock advisors are staying optimistic and not taking into consideration the reliability of corporate earnings. Consider the Investors Intelligence Advisor Sentiment index. It has been increasing for three consecutive periods and is closing in on highs …

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Friday, May 31, 2013 – Economic Wallbanger

Economic Wallbanger by Sinclair Noe DOW – 208 = 15,115SPX – 23 = 1630NAS – 35 = 345510 YR YLD + .04 = 2.16%OIL – 1.98 = 91.63 GOLD – 25.40 = 1389.30SILV – .51 = 22.37 We finish the month of May with the Dow Industrials up 1.9% on the month; the S&P 500 posted a monthly gain of 2.1%, and the Nasdaq Composite added 3.8% for the month. With this week’s declines, the MACD indicator for the Sell in May strategy, finally turned negative, just in case you had been waiting. The S&P 500 marked seventh monthly advance, its longest monthly winning streak since one ending in September 2009. The Dow industrials recorded their sixth straight monthly gain. Treasury prices dropped again today to finish their worst monthly performance since December 2010; the yield on the 10-year note climbed 46 basis points on the month. At one point during today’s trading, the yield topped 2.20%. Next week, we’ll see how the labor market is behaving. Today we found out that the unemployment rate for the 17 nation Eurozone has increased to 12.2%, the highest level since data has been compiled starting in 1995. Consumer price inflation was far below the ECB’s target of just below 2%, coming in at 1.4% in May, slightly above April’s 1.2% rate. Price increases may quiet concerns about deflation, but the deepening unemployment crisis is a threat to the social fabric of the eurozone, with almost two-thirds of young Greeks unable to find …

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Tuesday, May 28, 2013 – The Central Banks Grand Experiment, Continued

The Central Banks Grand Experiment, Continued by Sinclair Noe DOW + 106 = 15,409SPX + 10 = 1660NAS + 29 = 348810 YR YLD + .12 = 2.13%OIL + .88 = 95.03GOLD – 4.90 = 1382.40SILV – .12 = 22.37 New record highs for the Dow, not for the S&P 500. Last week there was considerable hand wringing and flop sweat about the idea that the Federal Reserve might pull back from QE. And you may recall that I told you that I didn’t think so; we might see the Fed change the composition of the accommodative monetary policy in order to avoid particular asset bubbles, but they would not abandon a loose money policy; they might even try out some new tools. The economic stagnation of the major developed nations has driven central banks in the United States, Japan, Britain and the European Union to take increasingly aggressive action. Because governments are not taking steps to revive economies, like increasing spending or cutting taxes, the traditional concern of central bankers that economic growth will cause too much inflation has been supplanted by the fear that growth is not fast enough to prevent deflation, or falling prices. The European Central Bank faces legal and political restraints that make it harder for the bank to imitate the other major central banks. It cannot finance governments, which limits its ability to buy any country’s bonds. Still, there has been a shift in sentiment from the ECB, including lower rates and a change …

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Wednesday, April 24, 2013 – God Bless the Child

God Bless the Child by Sinclair Noe DOW – 43 – 14,676SPX +.01 = 1578NAS +0.32 = 326910 YR YLD un = 1.70%OIL + 2.43 = 91.61GOLD + 17.90 = 1432.50SILV + .22 = 23.26 Them that’s got shall get; them that’s not shall lose; so the Bible said, and it still is news. The Pew Research Center has analyzed the most recent date from the Census Bureau, and it turns out the rich got richer and the poor got poorer. During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%. From the end of the recession in 2009 through 2011 (the last year for which Census Bureau wealth data are available), the 8 million households in the US with a net worth above $836,033 saw their aggregate wealth rise by an estimated $5.6 trillion, while the 111 million households with a net worth at or below that level saw their aggregate wealth decline by an estimated $0.6 trillion. Because of these differences, wealth inequality increased during the first two years of the recovery. The upper 7% of households saw their aggregate share of the nation’s overall household wealth pie rise to 63% in 2011, up from 56% in 2009. On an individual household basis, the mean wealth of households in this more affluent group was almost …

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Monday, April 22, 2013 – Airplanes, Austerity, and Flying Bulls

Airplanes, Austerity, and Flying Bulls by Sinclair Noe DOW + 19 = 14,567SPX + 7= 1562NAS + 27 = 3233 10 YR YLD – .01 = 1.70%OIL + .80 = 88.81GOLD + 19.80 = 1427.30SILV + .12 = 23.51 It’s Monday but it’s a better Monday than last Monday. No bombings to report today, at least not in our country. Over the weekend, the cover story on Barron’s magazine featured a cartoon drawing of a bull on a pogo stick, leaping through the air. You may recall that 6 months ago, Barron’s poll of big money, institutional investors were bearish on the market; that was about 1,000 points ago. Now they’re bullish. This would be a contrary indicator. But not today. Today, the bulls were buying the dips. The market started negative but finished positive. It’s all about momentum. Many fundamentally-oriented investors have been licking their wounds. And the nature of momentum-driven investing is that it can work longer than more sober-minded souls would think possible. An open question is the odd continued rise of stock prices even as corporate earnings weaken. Why are investors paying more for companies whose earnings are declining in aggregate? In normal bull markets, you see a new leadership group emerge, and late in cycle, investors increasingly favor conservative stocks. This time the leaders are defensive plays, high quality companies that pay healthy dividends. While bulls say that this is predictable given ZIPR, we’ve had ZIPR for years now.When this disconnect ends is anyone’s guess. But markets like this …

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Thursday, April 18, 2013 – Elvis and Other Ongoing Investigations

Elvis and Other Ongoing Investigations by Sinclair Noe DOW – 81 = 14,537SPX – 10 = 1541NAS – 38 = 3166 10 YR YLD – .02 = 1.69% OIL + 1.68 = 88.36GOLD + 14.60 = 1393.10SILV – .03 = 23.38 Emergency teams went house to house through mounds of debris in a devastated four-block area of West, Texas; that’s the name of the town – West; it’s near Waco. An explosion at a fertilizer plant leveled a big part of the town and there are 15 dead and perhaps 160 injured. Officials said there was no initial indication that the blast was anything but an industrial accident, but it is an ongoing investigation. Maybe someone will look into the wisdom behind building a fertilizer plant right next to a residential area and even a nursing home. Meanwhile, an interfaith service was held in Boston today to mourn the victims of the bombing. It was actually a very good service. Several dignitaries spoke, including President Obama, who promised that the perpetrators will face justice. But it is an ongoing investigation. The FBI has released pictures of a couple of guys carrying large backpacks; they think they might be suspects in the bombings. Meanwhile, the FBI has arrested a man in Mississippi for mailing letters laced with the poison ricin. The suspect is an Elvis impersonator. I can’t make this stuff up. We’re seeing economic growth cool off a little bit after a strong start to the year. The index of …

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Wednesday, April 17, 2013 – Austerity Oops

Austerity Oops by Sinclair Noe DOW – 138 = 14, 618SPX – 22 = 1552NAS – 59 = 320410 YR YLD – .01 = 1.70%OIL – 2.35 = 86.37GOLD + 8.20 = 1378.50SILV – .03 = 23.41 The Federal Reserve released its Beige Book this morning. The Beige Book is just a survey of the 12 Fed Districts and the name is due to the fact that it has a beige cover. The survey covers the time from late February to early April. The info is more anecdotal than precise measurements. Of the Fed’s 12 districts, five reported “moderate” growth, five reported “modest” growth, and New York and Dallas reported slight accelerations. “Particular strength” was seen in residential construction and automobiles, which confirms the report on Monday dealing with industrial output. Consumer spending grew modestly, with higher gasoline prices, the expiration of the payroll tax cut and winter weather restraining growth. Lat week, the Commerce Department reported that retail sales were at a 9 month low. The sequester has rattled the defense industry with the automatic budget cuts; no surprise there. Overall, the Fed remains optimistic, but still concerned about fiscal policy. On the fiscal policy front, one of the main arguments for budget cuts and austerity comes from a 2010 study by two Harvard economists, Ken Rogoff and Carmen Reinhart. The study concluded that when a nation’s debt grows too big, it can slow growth. The idea is that when the debt to GDP ratio hits 90%, the result …

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Tuesday, March 12, 2013 – Smoke Signals

Mark your calendar – April 5 & 6 – and make your reservations for the 2013 Wealth Protection Conference in Tempe, AZ. For conference information visit www.buysilvernow.comor click hereor call 480-820-5877. This year’s conference features Roger Weigand, Nathan Liles, David Smith, Mark Liebovit, Arch Crawford, Ian McAvity, Bill Tatro, and I will speak on Friday. There is an expanded Q&A session with all speakers on Saturday. I hope you can attend. Smoke Signals by Sinclair Noe DOW + 2 = 14,450SPX – 3 = 1552NAS – 10 = 324210 YR YLD -.03 = 2.02OIL – 1.84 = 90.22GOLD + 10.90 = 1593.70SILV + .16 = 29.25 Today we will communicate with smoke signals, the same as the Vatican, which started its conclave to elect a new Pope with black smoke. Wall Street was blowing black smoke out of its chimneys for most of the day, and then near the end of trading, a little wisp of white smoke pushed the Dow iIndustrial Average into positive territory, and another record high close. President Obama travels to Capitol Hill to try to sell his grand bargain on the deficit. GOP blows black smoke from its chimney. Anyway, it appears that no one wants to listen to the president, meaning a grand bargain may be no easier to strike now than it was in 2011 or 2012 or any other time Obama has failed to do it. Paul Ryan responds by trotting out the Ryan Plan, which we’ve seen before; but this one …

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Tuesday, January 29, 2013 – Stimulus Truths and Tweaks

Stimulus Truths and Tweaks by Sinclair Noe DOW + 72 = 13,954SPX + 7 = 1507NAS – 0.6 = 315310 YR YLD +.03 = 2.00%OIL + .88 = 97.32GOLD + 9.40 = 1664.90SILV + .54 = 31.48 We have a gaggle of economic reports this week and we’ll try to keep up. The Conference Board reported that its gauge of consumer confidence dropped to 58.6 in January, the lowest level since November 2011. Consumers are more pessimistic about the economic outlook and, in particular, their financial situation. The hike in the payroll tax is taking the brunt of the blame for the less-than-rosy outlook. Disposable income is actually declining. It’s hard to be happy when your purse shrinks. The sales price on existing homes dropped in November according to the S&P/Case-Shiller home-price index, down a non-seasonally adjusted 0.1% decrease in November following a 0.2% decline in October. After seasonal adjustments, the 20-city home-price index rose 0.6% in November. Despite the recent decline, prices were 5.5% higher than during the same period in the prior year, for the strongest year-over-year growth since August 2006. Tomorrow, we’ll get a glimpse of 4thQuarter GDP. The economy likely grew at a 1% pace, which is very weak. Also tomorrow, The Federal Reserve wraps up its first FOMC meeting for the new year. They will likely continue with a fairly aggressive approach to stimulate the economy. In December, the Fed committed to adding $45 billion of monthly Treasury purchases to the existing QE3 program to …

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