Financial Review

Exit Signs

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-13-2016.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSS  Financial Review by Sinclair Noe for 01-13-2016   DOW – 364 = 16,151 SPX – 48 = 1890 NAS – 159 = 4526 10 Y – .04 = 2.07% OIL + .10 = 30.54 GOLD + 7.00 = 1094.50   US markets started trading higher but the gains faded fast. This has been the pattern in 4 of the last 5 trading sessions; early gains collapsing into the close. The next real level of support in the Dow is around 16,000, more specifically 15,981, the lows from September 28. Then the more significant level of support is at 15,370, the low from August 24. That doesn’t mean we will rush down to those levels. I would anticipate markets trying to rally at some point, just because the carnage has been brutal to start the year. Remember that on December 29, the Dow high was 17,750. That means the Dow is down about 1650 and closing in on a 10% correction over the course of the past 2 weeks. You can’t really call it a crash, but it is enough to make plenty of people nervous.   Yesterday, we talked about all the research analysts from the investment banks saying “sell everything” or “sell on rallies”; this kind of recommendation might be a contrarian indicator, or it might be headline grabbing hogwash, or it might be a self-fulfilling prophesy. Moving down the trading chain, RIAs, …

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Financial Review

Two Paths Diverge

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-12-02-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 12-02-2015 DOW – 158 = 17,729 SPX – 23 = 2079 NAS – 33 = 5123 10 YR YLD + .03 = 2.18 OIL – 1.67 = 40.1 GOLD – 15.60 = 1054.20   American businesses stepped up hiring last month, led by strong gains in retail, finance and other service industries. Payroll processor ADP says that private companies added 217,000 jobs last month, the most in five months. Service sector firms added 204,000, while manufacturers hired just 6,000. The figures come just two days before the government issues its official jobs report for November. If the Friday jobs report is anywhere close to today’s ADP report, it might lock in a rate hike at the Fed FOMC meeting in two weeks.   The productivity of American businesses was higher in the third quarter than initially reported — but so were labor costs. Newly revised government figures show that productivity rose at a 2.2% annual rate instead of 1.6%. Unit-labor costs were revised higher to show a 1.8% annual increase in the third quarter, and second quarter costs were revised higher. As a result, the year-over-year increase in labor costs climbed to a 3% rate, the highest level in six quarters. Unit-labor costs reflect how much it costs a business to produce one unit of output, such as a refrigerator or a ton of steel.   The Fed published their …

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Financial Review

A Busy Economic Calendar

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-30-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 11-30-2015 DOW – 78 = 17,719 SPX – 9 = 2080 NAS – 18 = 5108 10 YR YLD – .01 = 2.22% OIL + .02 = 41.73 GOLD + 7.90 = 1065.50 SILV – .01 = 14.16   For the month, the Dow was up 0.3%, S&P 500 gained 0.1% and the Nasdaq gained 1.1%. The yuan rallied after the IMF said it will be added to its basket of reserve currencies. The euro capped its worst month versus the dollar since March. The yield gap between German and American bonds widened to the most in nine years, while emerging-market stocks posted their biggest monthly slump since August. This week’s economic calendar is packed. Today the National Association of Realtors reported pending home sales rose 0.2% in October and its index of contract signings is up 3.9% compared to a year ago. NAR’s chief economist, Lawrence Yun, said supply isn’t keeping up with strong demand. You know the old supply-demand formula, and tight supply points to higher prices.   Data due tomorrow includes US auto sales, ISM Manufacturing, PMI manufacturing, and construction spending. Look for auto sales to come in at an annualized rate of 18.0 million units, with a particular emphasis on VW sales following the emissions cheating scandal. The Markit PMI is expected to drop slightly from 54.1 in October to about 52.5 in November. The ISM manufacturing survey …

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Financial Review

Low Price Leader

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-14-2015.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 10-14-2015 DOW – 157 = 16,924 SPX – 9 = 1994 NAS – 13 = 4782 10 YR YLD – .07 = 1.98% OIL – .37 = 46.29 GOLD + 15.40 = 1185.30 SILV + .22 = 16.22   Retail sales rose a seasonally adjusted 0.1% in September. Auto sales were strong, up 1.7% last month. Sales at gas stations were down 3.2% because gas prices were lower. Sales fell at Internet retailers, general stores, home centers, groceries and outlets that sell appliances and electronics. Sales rose at restaurants. Excluding autos and gas, sales were flat. Retail sales have risen 2.4% in the past 12 months, though the gain is a healthier 4.9% if gasoline is omitted.   The producer price index, which measures prices at the wholesale level, fell 0.5% last month. In September the wholesale price of gas sank almost 17%, marking the sharpest decline since January. That drove down the overall cost of goods by 1.2%. The cost of services also fell by 0.4% last month, the biggest decline since February. Core producer prices, excluding the volatile categories of food, energy and trade fell a smaller 0.3% in September. Over the past year, overall producer prices have fallen an unadjusted 1.1%.   Inventories at U.S. businesses were flat in August. Business sales fell 0.6% in August, the biggest drop since January. The inventory-to-sales ratio, an indication …

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Financial Review

Carry On

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-02-2015.mp3Podcast: Play in new window | Download (Duration: 13:14 — 12.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 09-02-2015   DOW + 293 = 16351 SPX + 35 = 1948 NAS + 113 = 4749 10 YR YLD + .02 = 2.19% OIL + .59 = 46.00 GOLD – 6.10 = 1134.70 SILV + .08 = 14.80   For the first 8 ½ months of the year, stocks traded in a very tight range, for the most part. We had an occasional triple digit move on the Dow, but that was the exception – now it looks like the norm. Investors have weathered over two weeks of unusually wide-swinging trade that has left the S&P 500 with its worst monthly drop in three years and a loss of 8.5 percent from an all-time high in May. There really isn’t anything that would tell you today marks some kind of recovery, rather it is just volatility and turbulence. Get used to it. Keep calm and carry on.   World markets were a bit more sanguine today; the Shanghai Composite stabilized, but still closed just slightly lower. Nine Chinese brokerages pledged additional funds to purchase shares, answering fresh government calls to support equities. Investors may see the trend continue. Shanghai’s stock market will be closed Thursday and Friday as China commemorates the 70th anniversary of the end of World War II.   U.S. index provider MSCI has declared the market gyrations in China, and a barrage of interventions by the authorities …

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Financial Review

Endless Possibilities

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-07-15-2015.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW – 3 = 18,050 SPX – 1 = 2107 NAS – 5 = 5098 10 YR YLD – .05 = 2.35% OIL – 1.43 = 51.61 GOLD – 5.90 = 1149.90 SILV –  .28 = 15.19   I think the markets couldn’t quite figure out what to make of today.   In the late 1970s Sen. Hubert Humphrey and Rep. Augustus Hawkins sponsored legislation known as the Full Employment and Balanced Growth Act of 1978. The idea was to set monetary policy to try to achieve the goals of full employment, growth in production, price stability, and balance of trade and the budget. The Act also required the Federal Open Market Committee to report to Congress twice a year, in February and July; we used to call it the Humphrey-Hawkins testimony.   Testimony coincides with the publication of the Fed’s Beige Book, which was released today. The Beige Book cited improving consumer spending, mixed activity for transportation, positive reports on real estate, increasing lending activity, and “modest” wage pressures. The report did reveal trouble spots, such as the strengthening dollar, which led to soft growth around border areas, and the decline in oil and natural gas drilling.   The Humphrey-Hawkins Act expired about 10 years ago; perhaps because the goals of full employment, balanced budgets and balanced trade seem like Utopian pipedreams, but the Fed chair still heads to …

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Financial Review

A Perfect Gift

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-06-03-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 64 = 18,076 SPX + 4 = 2114 NAS + 22 = 5099 10 YR YLD + .10 = 2.37% OIL – 1.68 = 59.58 GOLD – 7.70 = 1186.00 SILV – .27 = 16.58   The U.S. trade deficit narrowed in April on a drop in imports. The Commerce Department said the trade gap narrowed to $40 billion from March’s revised deficit of $50 billion. The 26 percent drop in the April trade deficit was the largest decrease since early 2009 and reflects a surge in imports in March following the end of a West Coast ports labor dispute.   Service industries expanded in May at the slowest pace in 13 months. The Institute for Supply Management’s non-manufacturing index, which includes an array of industries from real estate to dining, declined to 55.7 from April’s 57.8. Readings above 50 signal expansion. Limited growth in orders reflects an American consumer who has been saving the extra cash from low gasoline prices and rising employment rather than spending it. Arts and entertainment, real-estate firms and rental companies led the list of the 15 non-manufacturing industries that reported growth in May. Mining, which includes oil extraction, contracted. An index of employment in service industries dropped to 55.3 in May from 56.7.   Payrolls processor ADP reports private employers added 201,000 jobs in May, the most since January. The ADP data came …

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Financial Review

Slow to Patch

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-04-15-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 75 = 18,112 SPX + 10 = 2106 NAS + 33 = 5011 10 YR YLD un = 1.90% OIL + 2.67 = 55.96 GOLD + 9.60 = 1202.50 SILV + .18 = 16.41   The Federal Reserve reports industrial production dropped 0.6% in March. The biggest drop since August 2012. For the first quarter, industrial production was down at 1% annual rate, the first quarterly decline since the end of the recession.   The National Association of Home Builders/Wells Fargo index of home builder confidence increased to 56 in April from 52 in March. Readings over 50 indicate that more builders see sales conditions as good rather than poor. All three components of the index improved in the month: sales expectations, buyer traffic, and the component gauging current sales conditions all moved higher.   China grew at its slowest pace last quarter since the global financial crisis in 2009; GDP expanded 7% in the three months to March from the year ago period, down from 7.3% the prior quarter. Retail sales and industrial output data broadly missed expectations, however, with the latter expanding at the slowest pace since 2008.   Japan overtook China as the top foreign holder of US government debt for the first time since the global financial crisis. Each country holds a little more than $1.22 trillion in US Treasuries, but Japan has about $7 …

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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: iTunes | 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 employers …

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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: iTunes | 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 say …

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