Financial Review

Cat Herders in the Oil Patch

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-28-2016.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 01-28-2016   DOW + 125 = 16,069 SPX +10 = 1893 NAS + 38 = 4506 10 Y – .02 = 1.99% OIL + 1.43 = 33.73 GOLD – 9.70 = 1116.00   The story of the day was oil, and it made for another ridiculous day of trading, dragging stocks up and down in its wake. Oil rose as much as 7.8% after Russia’s energy minister said that OPEC and other producers may meet to discuss output. Then, OPEC delegates said no talks were planned and oil prices floated back down to earth. OPEC is comprised of countries that rely on oil to fund national budgets. So, low oil prices have resulted in national deficits and desperate times. Several countries would probably welcome production cuts that might lead to higher prices but then you have Iraq pumping like never before; and then add Iran to the mix.   Iran has put the finishing touches on a deal to buy over 100 Airbus passenger jets. Iranian President Hassan Rouhani is in Europe, trying to revive business ties. Rouhani visited Italy with a 120-member delegation of business leaders and cabinet ministers, signing a raft of deals. The shopping trip then moved to France to buy planes. Peugeot is also scheduled to meet with the group. All those planes and cars cost money. Iran will be adding to production, not cutting.  …

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Financial Review

Lonesome Tom and Tom Alone

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-27-2016.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSS  Financial Review by Sinclair Noe for 01-27-2016 DOW – 222 = 15,944 SPX – 20 = 1882 NAS – 99 = 4468 10 Y + .01 = 2.00% OIL + .71 = 32.16 GOLD + 5.00 = 1125.70 Stocks started the session down, a little over 150 points, then rallied and turned positive, then the Fed released its policy statement to wrap up its two-day FOMC meeting, and stocks fell again; 350 points from peak to trough, even though there was no surprise in the statement.   The Federal Reserve statement had a few changes from the last statement. First, there was no change in interest rates – as expected. The Fed says it expects the economy will continue to warrant only gradual rate increases – as expected. They will closely monitor global economic and financial developments – a soft backpedal from December, when they said risks were balanced. Not a big surprise. Inflation is expected to remain low because oil prices are down, but that won’t last forever – yeah, yeah. The strong dollar is a bit of a drag. Information received since the Federal Open Market Committee met in December suggests that labor market conditions improved further even as economic growth slowed late last year – an acknowledgement that economic growth slowed, well that’s different. Their confidence in the economy has eroded since December. Not exactly. The Fed also noted the strength …

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Financial Review

Laissez les Bons Temps Rouler

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-26-2016.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 01-26-2016 DOW + 282 = 16,167 SPX + 26 = 1903 NAS + 49 = 4567 10 Y – .03 = 1.99% OIL + .11 = 30.45 GOLD + 11.80 = 1120.70   The Federal Reserve had always planned to pause after raising interest rates in December, but the question now is how long that break will last. Initial expectations were that the FOMC would raise rates again this March, but a downturn in the equity markets, a stronger dollar and weak inflation have led some to predict that another move may be months away. Investors may get some more insight as Fed officials gather today for a two-day session, their first policy-making meeting of 2016. For now, the Fed can simply say that they are data dependent and the 25 basis point increase in December has not had an effect on the economy. They might say that everything is basically good in the economy and the markets, if they get any mention at all, are just not looking at the right data.   In a recent speech, Federal Reserve Bank of New York President William Dudley summed up the situation: “In terms of the economic outlook, the situation does not appear to have changed much since the last [Federal Open Market Committee] meeting. Some recent activity indicators have been on the softer side, pointing to a relatively weak fourth quarter …

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Financial Review

Until After the Fact

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-25-2016.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 01-25-2016 DOW -208 = 15,885 SPX – 29 = 1877 NAS –  72 = 4518 10 Y – .03 =  2.02% OIL -2.36 = 19.83 GOLD + 11.90 = 1108.90   Stocks in Asia rallied overnight, with the Topix index in Tokyo increasing 1.3 percent, China’s Shanghai Composite Index rising 0.8 percent and the MSCI Asia Pacific Index adding 1.2 percent. Despite gaining in early trading, shares in Europe turned lower. US stocks were down all day, but the selling got worse into the close.   Oil gave up some of its recent gains after Saudi Arabia said it is keeping up investments in energy products and data from China showed that diesel consumption dropped for a fourth consecutive month. Also, Iraq’s oil ministry told Reuters that the country had record output in December, producing as much as 4.13 million barrels a day. A senior Iraqi oil official said separately the country may raise output even further this year. After posting a 21% gain in just 3 days last week, West Texas Intermediate closed down 7.3%.   Following the lifting of economic sanctions and the release of billions of dollars’ worth of frozen Iranian assets, Tehran is ready for business: The country just struck a provisional deal to buy eight A380 superjumbos, while an agreement for 100 more planes from Airbus and Boeing could be completed this week. Over the weekend, China and Iran also mapped out …

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Financial Review

Another Strong Jobs Report

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-12-04-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 12-04-2015 DOW + 369 = 17,847 SPX + 42 = 2091 NAS + 104 = 5142 10 YR YLD – .05 = 2.28% OIL – 1.01 = 40.07 GOLD + 25.30 = 1087.90   The economy added 211,000 jobs last month, beating estimates of about 200,000. The unemployment rate held steady at 5% as more workers entered the labor pool. The Labor Force Participation Rate increased in November to 62.5%, from 62.4% in October. The last two months’ jobs numbers were revised higher. The government said 298,000 new jobs were created in October instead of 271,000. September’s gain was raised to 145,000 from 137,000. Over the past 12 months, the economy has added 2.64 million jobs.   Let’s break down jobs by sector: Employment in construction rose by 46,000 in November, with much of the increase occurring in residential specialty trade contractors (+26,000). Over the past year, construction employment has grown by 259,000. Professional and technical services added 28,000 jobs. Over the year, professional and technical services has added 298,000 jobs. Health care employment increased by 24,000 over the month, following a large gain in October (+51,000). In November, hospitals added 13,000 jobs. Health care employment has grown by 470,000 over the year. Employment in food services and drinking places continued to trend up in November (+32,000) and has risen by 374,000 over the year. Retail trades added …

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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: Apple Podcasts | 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 …

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Financial Review

Inversion Dysfunction

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-23-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 11-23-2015 DOW – 31 = 17,792 SPX – 2 = 2086 NAS – 2 = 5102 10 YR YLD – .01 = 2.25% OIL + .09 = 41.99 GOLD – 8.50 = 1069.70 SILV – .04 = 14.25   Belgian authorities have extended a lockdown of Brussels for a fourth straight day after police raids searching for those behind last week’s Paris attacks failed to find a prime suspect. The Belgians say they have credible threats of imminent attacks against public gathering places like shopping malls and public transportation. The lockdown will see Brussels’ subway and many shops closed, as well as schools, offices, and mosques; although it is doubtful the terrorists are in mosques.   France’s economy slowed following the Nov. 13 terror attacks in Paris. However, that slowdown in the eurozone’s second-largest member wasn’t sharp enough to slow the Eurozone as a whole. Economic activity in the eurozone grew at the fastest pace since May 2011 in November, giving some optimism over the health of the region’s economy. Markit’s flash composite Purchasing Managers’ Index climbed to 54.4 from 53.9 last month, as a recovery continued to be led by the service sector. Growth meanwhile accelerated to a three-month high in Germany, where Markit’s flash composite PMI rose to 54.9 from 54.2, fueled by a big improvement in new business.   A reading of manufacturing sentiment in the US …

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Financial Review

Decision Day

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-28-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 10-28-2015   DOW + 198 = 17,779 SPX + 24 = 2090 NAS + 65 = 5095 10 YR YLD + .06 = 2.09% OIL + 2.93 = 46.13 GOLD – 11.30 = 1156.70 SILV + .07 = 16.04   It’s Decision Day for the Federal Reserve, and it was an easy decision. The FOMC wrapped up a two-day policy session with a statement that interest rates will remain unchanged near zero; where they have been stuck for 7 full years. The Fed’s statement left open the possibility that the Fed will raise rates at its final meeting of the year, in December. While noting that job growth has slowed, it said that other economic indicators remained relatively strong and the domestic economy “has been expanding at a moderate pace”. The Fed also signaled that its concerns about the global economy have diminished. In the statement from the meeting in September the Fed said global economic and financial developments might restrain domestic growth. In today’s statement they just say the Fed “is monitoring global economic and financial developments.”   The next FOMC meeting is scheduled for Dec. 15 and 16. Fed chairwoman Janet L. Yellen said in a late September speech that she still expected to raise rates this year, as long as economic growth continued. Stanley Fischer, the Fed’s vice chairman, said much the same a few weeks later. …

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Financial Review

Barn Cleaning

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-27-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 10-27-2015 DOW – 41 = 17,581 SPX – 5 = 2065 NAS – 4 = 5030 10 YR YLD – .03 = 2.03% OIL – .78 = 43.20 GOLD + 4.10 = 1168.00 SILV + .03 = 15.97   Congressional leaders have reached a tentative budget deal with the White House in a breakthrough that would set government funding levels for the next two years and extend the nation’s debt limit through 2017. The bill would raise the spending caps set in place in 2011 that would result in deep cuts to both defense and non-defense spending, called sequestration.  This deal would provide $80 billion in sequester relief.   The bipartisan agreement would include long-term entitlement reforms to the Social Security Disability Insurance (SSDI) program, the first major reform to Social Security since 1983.  The Social Security Disability Insurance program would be amended, in part to tighten and standardize eligibility requirements that now vary by state. That change was projected to save the government $5 billion. It also prevents a spike in Medicare B premiums for millions of seniors. The increases would have been caused by the rare absence of a cost-of-living increase in Social Security benefits, because of unusually low inflation.   The deal still needs Congressional approval, but for outgoing House Speaker John Boehner this was a matter of wrapping up unfinished business before his departure, …

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Financial Review

Watching and Waiting

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-13-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 10-13-2015   DOW – 49 = 17,081 SPX – 13 = 2003 NAS – 42 = 4796 10 YR YLD – .04 = 2.05% OIL – .53 = 46.57 GOLD + 5.00 = 1169.90 SILV + .09 = 16.01   Anheuser-Busch InBev and SABMiller have agreed on terms for a takeover, with the world’s largest brewer set to pay $106 billion. The deal brings one out of every three beers sold worldwide under a single company. Under terms of the agreement, AB InBev would pay a $3 billion break-up fee to SABMiller should the transaction fail to clear regulatory hurdles or shareholders don’t approve of it. If the deal goes through, it would be the biggest acquisition of the year, and the largest in British history. SABMiller’s two largest shareholders, Altria Group and Bevco Ltd., can receive cash and stock for their stakes, which account for 41 percent of the company. They won’t be able to sell the shares for five years; a move that might have tax benefits.   Dell’s $67 billion buyout of EMC appears to be a win for nearly everyone involved – except EMC bondholders. Investors in EMC’s $5.5 billion of bonds are down about $338 million since news of the deal first became public last week. Why’s that? Dell’s plan to raise about $50 billion in debt for the acquisition will push existing bondholders down …

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