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Tuesday, February 25, 2014 – Dumb Luck

Dumb Luck By Sinclair Noe DOW – 27 = 16,179SPX – 2 = 1845NAS – 5 = 428710 YR YLD  – .05 = 2.70%OIL – .76 = 102.06GOLD + 5.00 = 1342.60SILV – .07 = 21.99 Just a couple of economic reports to start. The S&P/Case-Shilller home Price Indices for December were posted today. Nationally home prices closed the year of 2013 up 11.3%, while posting a fourth quarter decline of 0.3%. After 26 months of consecutive gains, Phoenix posted -0.3% for the month of December, its largest decline since March 2011. Phoenix once led the recovery from the bottom in 2012, but Las Vegas, Los Angeles and San Francisco were the top three performing cities of 2013 with gains of over 20%. Another sign that the housing market slowed down during the fourth quarter: Fannie Mae, the nation’s largest mortgage guarantor, saw demand for foreclosed properties dip at the end of the year. Fannie reported last week an $84 billion annual profit for 2013 on the backs of large home-price gains and a series of one-time legal and accounting benefits. The report also showed that its inventory of foreclosed homes increased for the second straight quarter as it begins to take back more properties in Florida and other states where foreclosures have been tied up in courts. The report showed that the prices Fannie received on those properties, as a share of the underlying mortgage balances, declined slightly from the prior quarter for the first time in 2½ years. …

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Thursday, January 02, 2014 – Back in the Groove

Back in the Groove by Sinclair Noe DOW – 135 = 16,441SPX – 16 = 1831NAS – 33 = 414310 YR YLD – .04 = 2.99%OIL – 2.93 = 95.49GOLD + 17.50 = 1224.00SILV + .57 = 20.11 I’m back. We’ll try to settle into the groove here, starting with a look at the daily economic news. Financial data firm Markit said its final US Manufacturing Purchasing Managers Index rose to 55.0 last month, beating November’s 54.7 reading. So, manufacturing ended the year on a high note, growing in December at the fastest pace in 11 months. Signs of strength in both the manufacturing and services sector as well as stronger job growth across the economy contributed to the Federal Reserve’s decision in December to begin tapering, slowing its monthly bond purchases. I had expected the Fed would wait to begin the taper. I was wrong. It wasn’t really a shocking development because we knew they would eventually taper, it was just a matter of timing. The taper hasn’t actually started yet, it’s only been announced. One area where we’re starting to see some impact is in mortgage rates, now at the highest levels since September. The average rate for a 30-year fixed mortgage was 4.53% this week, up from 4.48%. And Freddie Mac also reports the average 15-year fixed rate climbed to 3.55% from 3.52%. While a jump in mortgage rates has slowed demand, buyers continued to push prices higher. According to the most recent S&P/Case-Shiller home price index, …

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Tuesday, August 27, 2013 – The Drums of War

The Drums of War by Sinclair Noe DOW – 170 = 14,776SPX – 26 = 1630NAS – 79 = 357810 YR YLD – .07 = 2.71%OIL + 3.34 = 109.55GOLD + 11.00 = 1417.00SILV + .19 = 24.62 Yesterday Secretary of State Kerry laid out the case against Syria. Today we learned the US could be ready to take military action as soon as Thursday. Defense Secretary Hagel today said: “We have moved assets in place to be able to fulfil and comply with whatever option the president wishes to take.” This follows last Wednesday’s suspected chemical attack near the Syrian capital, Damascus, which reportedly killed more than 300 people; more than 3,600 people were treated for nerve agents, and by some estimates the death toll is now approaching 500. You’ve surely seen the grisly videos. They are compelling, but in light of the faulty intelligence that preceded the war in Iraq, there is a call for stronger proof. White House spokesman Jay Carney says a report on chemical weapons use being compiled by the US intelligence community and will be published this week. There is not a requirement for Congressional approval for the president to initiate military action including strikes; rather the War Powers Act requires congressional notification, and that has been happening; of course questions of legality will be debated. The UK Parliament is to be recalled on Thursday to discuss possible responses. Prime Minister David Cameron said the world could not stand idly by after seeing appalling …

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Tuesday, June 25, 2013 – On Energy

On Energy by Sinclair Noe DOW + 100 = 14.760SPX + 14 = 1588NAS + 27 = 334710 YR YLD + .04 = 2.59%OIL + .07 = 95.25GOLD – 5.00 = 1278.60SILV – .05 = 19.74 A few economic reports to start. The S&P/Case-Shiller Home Price Index for April showed average home prices increased 12.1% compared to April one year ago. All 20 cities in the index showed positive year over year returns and this marked the highest monthly gains in the history of the Indices. San Francisco showed the largest year-over-year growth at 23.9%, followed by Las Vegas at 22.3%, Phoenix at 21.5%, and Atlanta at 20.8%. New York saw the lowest levels of growth at 3.2%. Meanwhile, the Commerce Department reports sales of new homes rose in May to the highest rate since mid-2008. Sales increased 2.1% last month to an annual rate of 476,000. The median price of new homes, meanwhile, dropped 3.2% to $263,900 last month from a record high of $272,600 in April.  Business orders for durable goods, the big ticket items, rose 3.6% to a seasonally adjusted $231 billion. Business investment excluding defense and aircraft was up 1.1%, marking a third straight gain. A big factor was a 51% increase in orders for new passenger planes. In the first five months of 2013, business orders have risen 2.1% in compared to the same period last year. The Conference Board’s consumer confidence index jumped to 81.4 in June, the best reading since January 2008 and …

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Tuesday, March 26, 2013 – Miles to Go

Miles to Go by Sinclair Noe DOW + 111 = 14,559SPX + 12 = 1563NAS + 17 = 3252 10 YR YLD – .01 = 1.91OIL + 1.40 = 96.21GOLD – 5.90 = 1600.50SILV – .09 = 28.86 The Dow Industrial hit a record hit close today, taking out the March 14 closing high. The S&P 500 came within a couple of points of the high close; it is having a hard time breaking through the ceiling; you just have to content yourself with the idea that the index has more than doubled from the lows of March 2009. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines, fell 7.1 percent to 12.77. The gauge has tumbled 29 percent for the year. It is a reflection of complacency. We have many things to cover today. Home prices were up in January and the year over year improvement in prices was the fastest in 6 years. The S&P Case Shiller Index of existing home sales was up 0.1% in January, and the year over year gains were 8.1%. On a year-over-year basis, all 20 cities measured by the Case-Shiller index improved, led by a 23.2% surge in Phoenix, with New York bringing up the rear with a 0.6% advance. Sales of new U.S. homes fell 4.6% in February to mark the biggest drop in two years, though poor weather likely played a big role. Sales slowed to an annual rate of 411,000, …

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Tuesday, September 25, 2012 – Fed Good at Growing Inequality

Fed Good at Growing Inequality by Sinclair Noe DOW – 101 = 13,457SPX – 15 = 1441NAS – 43 = 311710 YR YLD -.04 = 1.68%OIL – .51 = 90.86GOLD – 3.90 = 1761.60SILV – .23 = 33.84PLAT + 8.00 = 1634.00 Let’s start with a few economic reports. Case Shiller’s Index of existing home sales posted a 1.6% increase in July; all 20 cities in the index saw housing prices rise; it’s the fourth month of price increases, and the past 12 months are now showing increases. This is very positive news for housing. Pricesin Phoenix gained 2.2% to take the year-on-year increase to 16.6%, by far the strongest advance of any major metropolitan area. Los Angeles saw a 1.3% gain, and the year-over-year comparison has now turned positive by 0.4%. The consumer-confidence index increased to 70.3 in September, the highest level since February. Generally when the economy is growing at a good clip, confidence readings reach at least 90. September expectations increased for employment and business conditions, while consumers’ views on the present situation also rose. One of the big factors affecting the optimistic outlook is the turn in the housing market.  In August, the dividend-reinvested S&P 500 was up some 18% year-on-year. The combination of positive returns on stocks and real estate hasn’t been this good since 2006. Any economic gains are still fragile but you take whatever positives you can find. Both consumer-confidence measures, the one conducted by the University of Michigan and the one done …

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March, Tuesday 27, 2012

DOW – 43 = 13, 197 SPX – 3 = 1412NAS – 2 = 312010 YR YLD -.06 = 2.19%OIL – .52 = 106.81GOLD – 9.30 = 1681.60SILV -.25 = 32.69 PLAT + 6.00 = 1656.00 A flat trading day on Wall Street; weakness in financials compared to a little strength in tech; the weakness carried the day. The Standard & Poor’s/Case-Shiller index of 20 American cities fell 0.8% from December to January and 3.8% from January 2011. Sixteen cities tracked by the index posted declines. Eight cities saw average home prices hit new lows. Home values fell for the fifth-straight month and prices dropped to their lowest levels since 2003. In January, Washington, Miami and Phoenix were the only metro areas that posted monthly gains. Robert Shiller, a professor of economics at Yale University and co-creator of the Standard & Poor’s/Case-Shiller Index, says the market has “a chance” of rebounding even though the downward momentum in the real estate market has accelerated in the past five years. Shiller says the problems facing mortgage giants Fannie Mae and Freddie Mac must be resolved before housing can bottom. There is speculation that Fannie and Freddie could sell bundles of foreclosed homes to hedge funds; both Fannie and Freddie are reportedly leaning toward principal mortgage write-downs and loan forgiveness, but don’t hold your breath on that. Of course you don’t make your home buying decisions based on national averages. All real estate is local. There have been several calls of a housing …

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