Financial Review

Off to the Races

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-04-2016.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 01-04-2016 DOW – 276 = 17,148 SPX – 31 = 2012 NAS – 104 = 4903 10 YR – .02 = 2.25% OIL – .11 = 36.93 GOLD + 13.50 = 1075.50 The Dow started the morning with a 467 point decline. An inauspicious start to trading in 2016 kicked off, or more accurately fell down, this morning in China. Traders in Shanghai reacted to growing tensions in the Middle East and a drop in one of China’s manufacturing gauges. Fresh manufacturing surveys revived concerns about Beijing’s economic slowdown. China’s manufacturing activity contracted for the 10th straight month in December – the official manufacturing PMI stood at 49.7 in December. The yuan, which began new extended trading hours today, also hit its lowest point in more than four years in both onshore and offshore trade.   The China CSI 300 Index dropped 5% and that triggered circuit breakers that resulted in a 30 minute halt in trading of all stocks. When trading resumed, the traders were scared and they rushed to exit their positions. In a matter of about 7 minutes the Index dropped to a loss of 7%, and the next round of circuit breakers triggered a halt to trading for the remainder of the day.   The benchmark Shanghai Composite index closed the shortened session down 6.85% while the broader CSI 300 index, encompassing the largest …

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Financial Review

No Rhyme nor Reason

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-08-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 09-08-2015   DOW + 390 = 16,492 SPX + 48 = 1969 NAS + 128 = 4811 10 YR YLD + .06 = 2.19% OIL – .11 = 45.94 GOLD – 1.40 = 1122.40 SILV + .22 = 14.90   There is no particular rhyme nor reason to explain today’s rally on Wall Street, or for that matter, last week’s declines. Last Friday’s jobs report did little to provide clarity about whether the Fed would raise rates at next week’s FOMC meeting.   The economy added 173,000 jobs in August, which was below expectations; and the unemployment rate dropped to 5.1%. Following Friday’s employment data, futures market traders predicted about a 20 percent chance a rate hike will come this month, down from around 30 percent before the jobs report. I think the Fed might act next week, just to clear the air. If you remember back to the “taper tantrum” of 2013, when the markets became jittery about the prospect of the end of Quantitative Easing, the anticipation was worse than the actual event. So, the easiest thing might just be to do it and be done.   Of course, it is easy to argue against a rate hike. The U-6 unemployment rate is still around 10.3%; some people consider this the “real” unemployment rate because it includes part-time employees seeking full-time jobs and marginally employed workers. …

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Financial Review

It Was All Yellow

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-31-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 08-31-2015 DOW – 114 = 16,528 SPX – 16 = 1972 NAS – 51 = 4776 10 YR YLD + .02 = 2.20% OIL + 2.80 = 48.02 GOLD + .60 = 1135.40 SILV + .04 = 14.73   Both the Dow and S&P had five days of gains or losses of more than 2 percent in August, making it the most volatile month in nearly four years. In August, the S&P lost 6.3 percent, the Dow fell 6.6 percent and the Nasdaq declined 6.9 percent. As far as Augusts go, this has been the worst performance for the Dow in 17 years. Overall it was the sixth worst monthly performance for the Dow and the worst since May 2010, when the Dow dropped 7.9%. For the S&P 500, it was the worst August since 2001; all 10 of the major S&P sectors were down for the month.   Investors are still divided over whether the Federal Reserve will hike rates next month, with Fed Vice Chairman Stanley Fischer adding to the doubts in Jackson Hole over the weekend, saying: “At this moment, we are following developments in the Chinese economy and their actual and potential effects on other economies even more closely than usual.” Fischer was careful to announce he wasn’t signaling an impending rate rise, but the remarks suggest a September move hasn’t been ruled out of the FOMC’s next …

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Financial Review

Better Than We Thought

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-27-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 08-27-2015 DOW + 369 = 16,654 SPX + 47 = 1987 NAS + 115 = 4812 10 YR YLD un = 2.17% OIL + 4.03 = 42.63 GOLD + .10 = 1126.50 SILV + .41 = 14.62   Yesterday Wall Street cracked a six-day losing streak with its best rally in nearly four years. Today, traders piled on; the two-day total, 978 points on the Dow industrials and the best two-day percentage gain since the crisis of 2008; which wipes out Monday’s losses, but still leaves the Dow down from one week ago. On the longer-term charts, Monday and Tuesday dropped below the lows of last October at 15,855, compared to Monday’s low of 15,370, which basically matched the lows from February 2014 at 15,340. On a long-term chart this now provides a range of support. With today’s gains, the S&P has recovered about half of the 11-percent meltdown it suffered over a six-day losing streak.   China’s key stock market index surged 5.3 percent earlier today, for its biggest gain in eight weeks, and the first gain in five sessions. China has been selling down its holdings of US Treasuries; the idea is to put a floor under the devaluation of the yuan; also probably to raise some capital for stimulus. So far, it isn’t an asset dump and there is absolutely no evidence it is the source of …

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Financial Review

Shoddy Excuse for a Market

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-25-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 08-25-2015 DOW – 204 = 15,666 SPX – 25 = 1867 NAS – 19 = 4506 10 YR YLD + .14 = 2.13% OIL + 1.07 = 39.31 GOLD – 14.50 = 1141.40 SILV .10 = 14.80   Leading Asian markets fell again with the Shanghai Composite Index closing with a 7.6% loss and the Nikkei down 4.0%, while other key Asian markets closed with milder losses and Hong Kong ended up in positive territory. European markets were broadly higher, led by the first rise in the FTSE 100 in 11 sessions; the FTSE closed up over 3%; the Euro Stoxx 50 closed up 4.7 percent.   China’s stock market has dropped 22% in the past 4 sessions. Today, their central bank responded by cutting interest rates for one-year lending by 25 basis points to 4.6%, while the one-year deposit rate will fall a quarter of a percentage point to 1.75 percent. The required reserve ratio will be lowered by 50 basis points for all banks to cover funding gaps. China’s surprise yuan devaluation on Aug. 11 led to a tightening in liquidity as the PBOC subsequently bought its currency to stabilize the exchange rate and curb capital outflows. Roughly $4.5 trillion has evaporated from the Chinese markets since the middle of June – real, tangible wealth that no longer exists. Equities on mainland Chinese exchanges still trade at …

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Financial Review

Muppets in the Lobby

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-13-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 08-13-2015 DOW + 5 = 17,408 SPX – 2 = 2083 NAS – 10 = 5033 10 YR YLD + .06 = 2.19% OIL – 1.07 = 42.23 GOLD – 10.80 = 1115.70 SILV – .12 = 15.52 So, stocks closed basically flat, but it was a roller coaster ride. The major indices started the day in negative territory, then recovered, only to slide into the close. This was a very busy day for economic reports.   Sales at US retailers were solid in July and stronger than previously estimated for May and June. Retail sales rose a seasonally adjusted 0.6% last month, or by 0.4% excluding the auto sector. In the retail sales data in July, the gains were led by the auto sector, where sales jumped 1.4%. This was expected as the light vehicle selling rate rose to a seasonally adjusted 17.5 million units, the second best result since early 2006. And just a quick reminder that many auto sales are imports. But the sales gain in July was broad based. All sectors showed increases except electronics and general merchandise and department stores. In the past year, retail sales have risen 2.4%.   A side note here; it may seem strange that consumers are spending less on electronics, after all it seems like everybody has smartphones and other electro-gadgets; the reality is that we are buying …

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Financial Review

Dead Cats and Shade Balls

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-11-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 08-11-2015 DOW – 212 = 17,402 SPX – 20 = 2084 NAS – 65 = 5036 10 YR YLD – .10 = 2.14% OIL – 1.71 = 43.25 GOLD + 4.60 = 1109.70 SILV + .13 = 15.46   Since mid-July the Dow Industrial Average has dropped from a high of 18,137, including a 5 session losing streak; in late July the Dow dropped below its 200 day moving average, indicating a downtrend; it bounced up to touch the 200-day moving average but could not break through; after that we started August with a 6 session losing streak. Yesterday, the Dow bounced 241 points; and that is looking like a dead cat bounce today.   China’s central bank devalued the yuan in an effort to help jump-start its stalling economy. The central bank cut its daily reference rate by 1.9 percent, triggering the yuan’s biggest one-day drop since China ended a dual-currency system. For background, the yuan’s peg to the dollar had been in place since 2006. The People’s Bank of China, their central bank, would buy or sell yuan to keep the currency near a certain value against the dollar. The dollar’s been strong since 2011. And so, the peg made the yuan strong too.   The People’s Bank of China called the change a one-time adjustment and said its fixing will become more aligned with supply and demand. …

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Financial Review

Rockets and Rocks

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-07-23-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 119 = 17,731 SPX – 12 = 2102 NAS – 25 = 5146 10 YR YLD – .05 = 2.27% OIL – .74 = 48.45 GOLD – 3.60 = 1091.40 SILV – .14 = 14.76   Greece can begin bailout talks. Greece’s parliament approved new reforms that pave the way for Prime Minister Alexis Tsipras to begin negotiating his country’s third bailout. Parliament overwhelmingly approved the measures, but roughly a quarter of Tsipras’ Syriza party voted against the reforms. Now Greece and its creditors will begin working out the details of the latest bailout package, the third for Athens in the past five years. Nearly everyone agrees that Greek debt is unsustainably high, but that’s where the agreement ends. The IMF on July 14th issued a report calling for debt relief, a 180 turn from their earlier demands of austerity. The monetary fund recommended either a “very dramatic extension” of payment deadlines by up to 30 years or “deep upfront haircuts,” banker jargon for write-offs.   Lots of headlines flew out of Asia  overnight: Japan’s exports increased the most in five months in June, fueled by strengthening overseas demand, but imports remained subdued due to the effect of lower commodity prices. South Korea’s economy logged its weakest expansion in six years in Q2, recording just 0.3% growth from the previous quarter, as the country got battered by a MERS …

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Financial Review

Sheepish Algorithms

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-07-14-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 75 = 18,053 SPX + 9 = 2108 NAS + 33 = 5104 10 YR YLD – .03 = 2.40% OIL + .84 = 53.04 GOLD – 2.70 = 1155.80 SILV – .13 = 15.48   The stock market posted its first 4-day winning streak since January. The S&P 500 last week fell as much as 4 percent from its all-time high, and has since recovered to trade within 1 percent of its record set in May. The S&P 500 and the Dow are up 3 percent over four sessions, while the Nasdaq Composite has added 4 percent. The United States and other world powers reached an agreement with Iran that calls for limits on Tehran’s nuclear program in return for lifting economic sanctions that have crippled Iran’s economy, enabling the oil-rich nation to ramp up its energy exports, access international finance and open the doors to global investors. Full implementation of the agreement will likely take months and is contingent on the pace at which Iran meets its obligations. The deal will keep Iran from producing enough material for an atomic weapon for at least 10 years and impose provisions for inspections of Iranian facilities, including military sites.   Oil prices initially dropped when the Iran deal was announced, but then prices climbed higher. The oil markets were not surprised by the news announcement, and a …

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Financial Review

Sound and Fury

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-07-10-2015.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 211 = 17,760 SPX + 25 = 2076 NAS + 75 = 4997 10 YR YLD + .11 = 2.41% OIL + .04 = 52.82 GOLD + 3.50 = 1163.80 SILV + .23 = 15.72   For the week, the Dow rose 0.17 percent while the S&P fell 0.01 percent and the Nasdaq ended down 0.23 percent in its third straight weekly decline. The markets were full of sound and fury, signifying nothing, perhaps.   Greece faces a Sunday deadline to reach a deal with its creditors. Yesterday, Greek Prime Minister Alexis Tsipras submitted a proposal that appears to meet most creditor demands in exchange for a new €53 billion-euro bailout. The package of spending cuts, pension savings and tax increases almost mirrors that from creditors on June 26, which was rejected by Greek voters in a July 5 referendum. Eurozone decision makers are set to assess the plan during crisis meetings on Saturday and Sunday. Meanwhile, Tsipras took the proposal to the Greek parliament to see if they will stand behind the deal. Outside, anti-austerity protestors rallied against the deal; which makes sense; last week a strong majority voted against the very type of deal Tsipras is now trying to sell. The Greek blueprint for pension cuts and VAT increases is essentially copied word-for-word from the June 24 European proposal; it does not appear to include debt relief. …

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