Financial Review

Pendulums Swing Wide

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-07-2016.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 03-07-2016 DOW + 67 = 17,073 SPX + 1 = 2001 NAS – 8 = 4708 10 Y + .02 = 1.90% OIL + 1.99 = 37.91 GOLD + 7.90 = 1268.00   The U.S. stock market posted its third consecutive weekly gains last week, following an impressive jobs report on Friday. Stocks pulled out small gains today, for the fifth consecutive session. The S&P 500 has now gained in 11 out of 16 sessions since its Feb. 11 low, and closed last week above its 100-day moving average for first time in 2016.   The Federal Reserve FOMC meets next week to determine monetary policy and the battle lines are being drawn. Fed Governor Lael Brainard, who has emerged as a leader of the Fed’s dovish faction, argued for “patience” in raising interest rates. Fed Vice-Chair Stanley Fischer, who has consistently sounded more hawkish than many of his colleagues, warned that inflation is showing signs of accelerating; which would indicate his preference for raising rates. Adding to the mixed signals, the European Central Bank meets this week and is widely expected to expand its stimulus measures, which likely means they go more negative. The big questions being how big and in what form? And that would just make a Fed rate hike all the more awkward.   Negative rates have been spreading through important sectors of high finance …

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Financial Review

Moderate to Mixed

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-02-2016.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 03-02-2016   DOW + 34 = 16,899 SPX + 8 = 1986 NAS + 13 = 4703 10 Y + .01 = 1.85 OIL + .40 = 34.80 GOLD + 7.80 = 1240.50   Today the equity markets were regaining their footing after a big move yesterday. Treasury yields rose as job market data reinforced the view that the Federal Reserve will raise interest rates later this year. Crude fell below $35 a barrel after earlier hitting a two-month high. Government data showed inventories rose by 10.4 million barrels to 518 million in the week to Feb. 26, almost triple the 3.6 million-barrel increase expected by analysts. Asian stocks rose overnight to a two-month high with Japan’s and China’s main indexes both up more than 4 percent.   The European Central Bank will review its stimulus next week against a background of heightened economic risks and weaker-than-expected inflation. ECB President Mario Draghi sent a letter to European lawmakers underlining the bank’s readiness to use all its tools to drive up prices. The Eurozone slid back into deflation in February, driving the ECB further from its inflation target of just below 2%.   Moody’s Investors Service has lowered the outlook on China’s credit rating from stable to negative. Moody’s writes: “Without credible and efficient reforms, China’s GDP growth would slow more markedly as a high debt burden dampens business investment.” Moody’s current Aa3 …

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Financial Review

Breaking Up Is Hard To Do

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-2-02-16-2016.mp3Podcast: Play in new window | Download (Duration: 20:26 — 9.4MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 02-16-2016 DOW + 222 = 16,196 SPX + 30 = 1895 NAS + 98 = 4435 10 Y + .03 = 1.78% OIL – .36 = 29.08 GOLD – 8.50 = 1201.30 Top oil officials from Russia, Saudi Arabia, Qatar, and Venzuela met in Doha and have agreed to freeze crude output at January levels, targeting a supply glut that’s sent prices to 13-year-lows.

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Financial Review

A Hot One

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-21-2016.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 01-21-2016 DOW + 115 = 15,882 SPX + 9 = 1868 NAS + 0.37 = 4472 10 Y + .04 = 2.02% OIL + 1.50 = 29.85 GOLD + .20 = 1102.40 The European Central Bank announced today that they will hold interest rates at record lows of 0.3%. Mario Draghi said the European Central Bank may need to provide more stimulus programs as soon as March to address concerns about the euro-area recovery. Draghi said, “Downside risks have increased again amid heightened uncertainties about emerging-market growth prospects. It would therefore be necessary to review and possibly reconsider our monetary-policy stance at our next meeting.” Now remember that the markets just love free money, and that was essentially what Draghi promised.   China’s central bank cranked up cash injections in its money-market operations for the third week in a row, trying to counter capital outflows. The PBOC added $60 billion to the financial system using reverse-repurchase agreements, the most in three years. The Shanghai composite dropped 3.2%.   Brazil’s central bank kept policy on hold. The Central Bank of Brazil held its benchmark rate at 14.25%, surprising the consensus, which was calling for a 50-basis-point hike to 14.75%. The bank has been under pressure from politicians and local businesses to raise rates in an effort to combat inflation that is running at a 12-year high, above 10%.   Oil prices moved …

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Financial Review

A Far, Far Better Thing

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-12-03-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 12-03-2015 DOW – 252 = 17,477 SPX – 29 = 2049 NAS – 85 = 5037 10 YR YLD + .15 = 2.33% OIL + 1.33 = 41.27 GOLD + 8.40 = 1062.60 The S&P 500 suffered its biggest drop since late September.   The European Central Bank cut its deposit rate commercial banks must pay to store money overnight to minus 0.3% from minus 0.2%. The ECB left its key lending rate unchanged at 0.05% and the rate on its marginal lending facility at 0.3%. They also announced they will extend their bond buying program until March 2017. But the central bank did not increase the monthly spending on bonds beyond the current monthly level of 60 billion euros, or $63 billion. With inflation at just 0.1%, unemployment still over 10% and bank lending disappointing, many analysts were expecting more aggressive moves. Now, here’s where it got interesting; the dollar index dropped over 2%, at one point the euro was up about 3% but finished trade with modest gains. Early this morning the Financial Times tweeted and reported the ECB was leaving rates unchanged. Oops. But even after the correction, the euro held on to some of the gains.   Even as the ECB announced fresh stimulus, the Federal Reserve is considering tightening monetary policy. Actually, it is more than just a consideration – the Fed has now …

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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

What Puzzle?

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-20-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 11-20-2015 DOW + 91 = 17,823 SPX + 7 = 2089 NAS + 31 = 5104 10 YR YLD + .01 = 2.26% OIL – .15 = 40.39 GOLD – 4.80 = 1078.00 SILV – .16 = 14.23     The S&P gained 3.3% for the week, its best showing since December. The Dow rose 3.4% for the week and the Nasdaq added 3.6%. And now we begin the Santa Claus rally on Wall Street, which kicks off with the Turkey Shoot. For 35 years prior to 1987, the Wednesday before and the Friday after Thanksgiving combined were up 33 times. The only declines were in 1964 and 1965. Subsequently, this trend changed. In the 28 years since 1987, there have been 12 declines and 16 advances. As Thanksgiving bullishness lost steam in 1987, the rally afterwards occurred more frequently. Since 1987, DJIA has logged gains in 22 of 28 years from the close on Friday after Thanksgiving to yearend. The S&P 500 is up 0.5% in November and 1.5% thus far in 2015. There are 28 trading days remaining in 2015.  And going back to 1950, December is the best month of the year for the S&P 500 with the final 30 days of a year producing a mean gain of 2.36%. There could still be a black swan or some other exogenous event. This does not mean …

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Financial Review

Stormy Weather

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-23-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 10-23-2015 DOW + 157 = 17,646 SPX + 22 = 2075 NAS + 111 = 5031 10 YR YLD + .05 = 2.08% OIL – .65 = 44.73 GOLD – 1.90 = 1165.00 SILV – .03 = 15.91   After Thursday’s closing bell Microsoft, Amazon, and Alphabet all reported very strong third quarter earnings, and these companies are big enough to lift the entire market; today they added $80 billion in market cap. Amazon and Alphabet hit all-time highs, and Microsoft moved to its highest levels since 2000. Toss in a little central bank easy money and you’ve got one of the best two day rallies in a long time. The S&P 500 gained 2.1% for the week; its fourth straight weekly gain; moving into positive territory year to date. For the week, the Dow rose 2.5 percent and the Nasdaq gained 3 percent. Oil capped its biggest weekly decline since August as expanding U.S. crude stockpiles exacerbated a global glut, and the dollar moved higher, especially against the euro.   China’s central bank cut interest rates today for the sixth time in less than a year (down 25 basis points to 4.35 percent) , and it again lowered the amount of cash that banks must hold as reserves. Monetary policy easing in the world’s second-largest economy is at its most aggressive since the 2008/09 financial crisis. The People’s Bank …

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Financial Review

Easy to Spot Winners

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-22-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 10-22-2015 DOW + 320 = 17,489 SPX + 33 = 2052 NAS + 79 = 4920 10 YR YLD un = 2.03% OIL + .18 = 45.38 GOLD – .80 = 1166.90 SILV + .16 = 15.94     European Central Bank policymakers are meeting today in Malta. ECB President Mario Draghi announced no change to interest rates or asset purchases, but he warned that emerging markets are hurting Eurozone growth prospects, and he hinted the central bank may lower the deposit rate further or expand its quantitative easing at its December meeting. Markets just love an accommodative central bank.   The European Economics Commission says “Greece has done a certain number of reforms, and we are going to give them money, €3 billion-euro in all,” and in the course of November, December, the commission will deal with the issue of the recapitalization of Greek banks and Greek debt.”     Chinese stocks recovered today as the People’s Bank of China added liquidity to the market. After the close on Wednesday, the PBOC injected $16.6 billion into 11 financial institutions via medium-term lending facilities. Meanwhile, the government’s anti-corruption campaign continues with a crackdown on golf, considered a lavish extravagance. Or in my case, cruel punishment.   New applications for U.S. unemployment benefits inched up by 3,000 to 259,000 in the week ended Oct. 17. This is the first gain after two …

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