Financial Review

Say Cheese

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-15-2015.mp3Podcast: Play in new window | Download (Duration: 13:17 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW – 106 = 17,320 SPX – 18 = 1992 NAS – 68 = 4570 10 YR YLD – .06 = 1.77% OIL – 2.28 = 46.20 GOLD + 33.50 = 1263.60 SILV + .11 = 17.06 After going through all of 2014 without a losing streak of more than three days, the S&P 500 today completed its second slide of five straight days. The benchmark gauge is down 3.4 percent over the past five days. For the past 3 years the Swiss have kept their currency, the Swiss franc, from getting too strong; they imposed a cap to keep the euro from trading below 1.20 francs. In early 2010 one franc was less than 0.7 euro. By the middle of 2011 the franc was nearly at parity against the euro, a massive move in a very short period. As the Eurozone experienced economic strife, Switzerland was calm and offered a safe haven. As money poured in, the franc became more and more expensive; which means that things made in Switzerland became more expensive when the Swiss exported. So, they capped the franc. That basically involved printing more francs and buying more euros. Fast forward to 2015, and the Eurozone is once again experiencing economic strife; money is once again pouring into Switzerland as a safe haven, and after 3 years the Swiss just threw up their hands and said …

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Financial Review

Third World Stuff

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-15-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review DOW – 173 = 16,141 SPX – 15 = 1862 NAS – 11 = 4215 10 YR YLD – .11 = 2.09% OIL – .13 = 81.71 GOLD + 8.90 = 1242.10 SILV + .05 = 17.55 Go back a mere 18 trading sessions and the market was at all-time highs. The Dow hit an intraday high of 17,350 and a closing high of 17,279, on September 19th; that was 18 trading sessions in the past. For the Nasdaq composite we have seen a 10% correction from recent highs. That means this drop happened fast, and it also means the bear may have more room to run; this move is not mature in terms of duration or magnitude. The major indices have dropped under the 200 day moving average; we were waiting for confirmation; we got it. The S&P looked to bounce off a different trendline. If you draw a straight line across the S&P lows beginning with the lows from 2011, which is where we saw support and a bounce today, at the 1820 level; it is also very close to the support levels from April at about 1815, which we talked about on Monday. That is an intermediate level of support, but it held today, and you have to respect the line, unless or until it breaks down. Once we hit certain levels, people start to feel the pain and they …

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Financial Review

Rarified Air

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-21-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSS08212014 DOW + 60 = 17,039 SPX + 5 = 1992 NAS + 5 = 4532 10 YR YLD – .02 = 2.40% OIL + .45 = 93.90 GOLD – 15.10 = 1277.30 SILV – .04 = 19.52 The S&P 500 broke two records during today’s session, climbing past its previous intraday all-time high of 1,991.39 and ending above its previous record close of 1,987.98. Both had been set on July 24. Family Dollar has rejected a $9 billion dollar buyout offer from Dollar General, opting instead for a smaller $8.5 billion dollar offer from Dollar Tree. The thinking is that a combination of the largest dollar store – Dollar General with the #2 Family Dollar, would be unlikely to win antitrust approval. Once upon a time, Sears was the largest retailer in the nation. Today, Sears Holdings announce it lost $975 million in the first half of the year; $573 million in the second quarter. This was the 9th consecutive quarter of losses, and the past quarter also marked the heaviest losses. Quarterly revenue dropped about 10%. The plan now is to close underperforming stores, or, in a classic example of corporate-speak “rationalizing our physical footprint.” The company successfully spun off Lands End earlier this year, to the benefit of shareholders. But its Sears Canada and Sears Automotive stores have been on the block for some time, indicating either a lack of interest on …

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Financial Review

Sunlight is the Best of Disinfectants

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-20-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: iTunes | Android | RSS08202014 DOW + 59 = 16979 SPX + 4 = 1986 NAS – 1 = 4526 10 YR YLD + .02 = 2.42% OIL + .63 = 93.49 GOLD – 3.80 = 1292.40 SILV + .04 = 19.55 No economic reports today, but the Federal Reserve released the minutes of the July 29-30 FOMC meeting. You will recall that the Fed left interest rates unchanged and continued the taper by reducing large scale asset purchases by $10 billion a month, with the plan to end purchases by October. The Fed had said in its policy statement following the July meeting that there was “significant” labor market slack, but the minutes showed many members of its policy-setting panel thought this characterization “might have to change before long.” Most Fed officials wanted further evidence the labor market and the economy were showing significant improvement before changing their view on raising rates, but they said, “Labor market conditions had moved noticeably closer to those viewed as normal in the longer run,” and policymakers “generally agreed” the job market was healing faster than they had expected. Most Fed policymakers felt any change in their view on when to start raising rates “would depend on further information on the trajectories of economic activity, the labor market and inflation.” Well, we got more data yesterday showing that inflation is not a problem yet; so that leaves economic activity and the labor …

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Financial Review

Friday, June 13, 2014, – Infallible Source Predicts Economic Collapse!

Infallible Source Predicts Economic Collapse! by Sinclair Noe   DOW + 41 = 16,775 SPX + 6 = 1936 NAS + 13 = 4310 10 YRYLD + .02 = 2.60% OIL + .38 = 106.91 GOLD + 2.80 = 1276.90 SILV + .15 = 19.77   For the week, the Dow was down 0.9%, the S&P fell 0.7 percent and the Nasdaq was down 0.25%. The week’s decline was the first after three weeks of consecutive gains on the S&P 500. For the year, the broad market index is up about 4.8%. So, it was a rough week, but a good Friday the 13th. The Producer Price Index measures prices at the wholesale level; the PPI was down 0.2% in May. The decline was driven lower by cheaper food and gas, and follows two months of strong gains. In the past 12 months, producer prices have risen 2%, matching the Federal Reserve’s inflation target. That’s down from an annual gain of 2.1% in April. Excluding the volatile food, energy and profit margin categories, (for all you people who don’t eat food or drive in cars) core producer prices were unchanged in May. Inflation, as measured by the consumer price index, has been mostly below 2% for the past two years.   Of course, that might change, at least for people who eat and drive cars. The price of oil has jumped the past few days, now standing at $106.91 a barrel, mainly on fears of a civil war in Iraq. …

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Financial Review

Monday, April 28, 2014 – But Our Bankers Aren’t Oligarchs

But Our Bankers Aren’t Oligarchsby Sinclair Noe DOW + 87 = 16448SPX + 6 = 1869NAS – 1 = 407410 YR YLD + .01 = 2.67%OIL – .03 = 100.57GOLD – 7.50 = 1297.30SILV – .16 = 19.67 This should be an interesting week. On Wednesday, the Federal Reserve’s Federal Open Market Committee, the FOMC, will meet to determine monetary policy; a statement will be issued Wednesday. On Friday, we’ll have the monthly jobs report. The market is jittery. The Dow fell 140 points on Friday, rose 139 on Monday morning, and gave it all back Monday afternoon, then recovered at little at the close. Investors are worried about the Ukraine crisis, the Fed’s tapering, peak earnings, high PEs, low GDP, inflation, deflation, and of course, their own shadows. So far, the stock market has merely been sluggish to start the year; no big crash, no big gains. Last week, the big 3 indices were down a little, while the indices are in negative territory year to date, that could change with one good week of trading. After doubling or tripling since 2009, stocks aren’t cheap any more. Companies, meanwhile, are finding it harder to keep raising earnings in a period of soft economic growth. This makes investors more cautious, but because speculative excess still hasn’t reached the extremes of past bubbles, and because the Federal Reserve is determined to sustain the recovery, there is less fear of a big decline. The Fed has started slowly rolling back its quantitative …

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Financial Review

Friday, April 25, 2014 – Don’t Hold Your Breath

Don’t Hold your Breathby Sinclair Noe DOW – 140 = 16,361SPX – 15 = 1863NAS – 72 = 407510 YR YLD – .02 = 2.66%OIL – 1.25 = 100.69GOLD + 9.90 = 1304.80SILV + .07 = 19.83 Consumer sentiment rose in April to a nine-month high as views on current and near-term conditions surged. The Thomson Reuters/University of Michigan’s final April reading on the overall index of consumer sentiment came in at 84.1, up from 80 the month before. Meanwhile, a new Gallup poll shows more Americans are optimistic about the job market this month than at any time since the 2008 financial crisis, with 30% saying now is a good time to find a quality job. That marks a significant improvement from the 8% who said they were optimistic about the job market in 2010, but it’s still a drop from the pre-2008 highs of almost 50%. And even though almost a third of Americans are optimistic, two-thirds still say the job market is lackluster; 66% of Americans say it’s not a good time to hunt for employment. Next week’s economic calendar includes a two day Federal Reserve FOMC meeting. Next Friday, we’ll have a monthly jobs report; the current estimates call for 215,000 net new jobs in April and the unemployment rate dipping to 6.6% from 6.7%. Also, the Commerce Department will release its first guess of first quarter GDP; the consensus estimate on the initial estimate is that the economy grew about 1%. The situation in Ukraine …

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Financial Review

Wednesday, April 16, 2014 – What is Really Plausible

What is Really Plausible by Sinclair Noe DOW + 162 = 16,424SPX + 19 = 1862NAS + 52 = 408610 YR YLD + .01 = 2.63%OIL + .05 = 103.81GOLD – .20 = 1303.20SILV + .07 = 19.73 Let’s start with some earnings news and then we’ll move over to economic data. Google posted $3.4 billion in net income, or $5.04 per share, in the three months ended March 31, compared to $3.3 billion, or $4.97 per share, in the year-ago period. Revenue rose 19% to $15.4 billion, but analysts had estimated $15.5 billion, and the shares were getting clobbered in late trades. IBM reported its lowest quarterly revenue in five years; IBM reported revenue of $21.7 billion for the quarter, but that marks the eighth consecutive decline in quarterly revenue. The company has been restructuring its business by cutting jobs and selling its low-end server business. This is not what you would call a growth model. Also, from the faulty business model file: Bank of America posted a $276 million loss for the most recent quarter. The financial results included a pre-tax expense of $6 billion, or approximately 40 cents a share after tax, to cover litigation costs as the bank moved to resolve mortgage-related litigation fallout from the financial crisis that began in 2007 and other issues; far worse than the $3.7 billion investors had braced for. The bank today agreed to a $584 million settlement of litigation over nine residential mortgage-backed securitizations insured by the Financial Guaranty …

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Financial Review

Wednesday, April 09, 2014 – Feeding Time at the ZIRP Trough

Feeding Time at the ZIRP Troughby Sinclair Noe DOW + 181 = 16,437SPX + 20 = 1872NAS + 70 = 418310 YR YLD un = 2.68%OIL + 1.04 = 103.60GOLD + 4.30 = 1313.30SILV  – .22 = 19.95 In an otherwise light week for economic news, the big report is today’s release of the FOMC minutes from last month’s meeting. No surprises. You may recall that after the last meeting, Chairwoman Janet Yellen talked about the possibility of raising the fed funds target rate after a “considerable time”; when pressed she indicated a “considerable time” was about six months after the Fed ends it asset purchases under Quantitative Easing. That would mean late spring or summer of 2015. Fed policymakers were unanimous in wanting to ditch the thresholds they had been using to telegraph a policy tightening; no hard and fast target of 6.5% unemployment or 2% inflation. The minutes indicate the Fed would like to see more improvement in the economy; the emphasis on quality rather than quantity. In other words, the Fed remains dovish, and they will taper but they will also keep rates low for a long time. And also, those “dots” are over-rated. The dots are actually charts suggesting the fed funds rate would top 2% by the end of 2016. In the minutes published today, several policy-makers claim the charts overstated the shift in projections, which would suggest the Fed is not ready to tighten policy. A couple of the voting members wanted to commit …

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Uncategorized

Monday, April 07, 2014 – I Don’t Know, They Don’t Know

I Don’t Know, They Don’t Know by Sinclair Noe DOW – 166 = 16,245SPX – 20 = 1845NAS – 47 = 407910 YR YLD – .03 = 2.69%OIL – .44 = 100.70GOLD – 5.40 = 1297.90SILV – .09 = 19.97 The biggest 3 day drop in the markets in about 2 months. All of the sudden we start hearing the Wall Street stock peddlers waxing enthusiastic about the prospects for a correction or a crash or whatever will scare you. Fear sells; with talk about a 1987-like stock market crash, geopolitical unrest in Ukraine and the risk of a debt crisis in China, investors are starting to get jittery. I don’t know, they don’t know. The big pullback so far has been in the Nasdaq, and especially biotech stocks. As always, you want an exit plan in place before you ever get into a trade; and if you don’t have an exit plan, get one now. You don’t make money by letting profits slip through your fingers. Earnings season gets underway this week. Expectations have been ratcheted down; at the start of the year, S&P 500 companies were projected to have grown earnings at 6.5%, now that estimate has slipped to 1.2%. We could see companies beat diminished expectations and start a fresh rally or miss expectations and the markets could get a bit ugly. The simple rule of thumb is that when the trailing P/E ratios hit 10, the S&P 500 is likely undervalued; when the P/E hits 20, …

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