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Thursday, August 29, 2013 – Pre-Labor Day GDP

Pre-Labor Day GDP by Sinclair Noe DOW + 16 = 14,841SPX + 3 = 1638NAS + 26 = 362010 YR YLD – .01 = 2.76%OIL – 1.30 = 108.80GOLD – 10.60 = 1408.20SILV – .52 = 23.97 No new war yet. The British parliament voted against military action in Syria. Britain was considered a key ally in any US-led coalition. PM David Cameron said the government would respect the decision of parliament which means that Britain will not take part in military strikes against Syria. Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 331,000. Claims for the prior week were revised to show 1,000 more applications received than previously reported. So, modest strengthening in the labor market. Next week, we’ll get the monthly jobs report. Meanwhile, the US economy accelerated more quickly than expected in the second quarter thanks to an increase in exports. Gross domestic product grew at a 2.5 percent annual rate, according to revised estimates, up from the initial guess of 1.7% growth. The second quarter’s growth rate followed gains of 0.1 percent in the fourth quarter and 1.1 percent in the first three months of this year. The trade deficit in the second quarter was smaller than previously estimated, reflecting the biggest gain in exports in more than two years.  Gross domestic income, which reflects all the money earned by consumers, businesses and government agencies climbed at a 2.5 percent annualized rate in the second quarter, matching the gain in GDP. Corporate …

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Wednesday, July 31, 2013 – GDP, FOMC, Swipes

GDP, FOMC, Swipes by Sinclair Noe DOW – 21 = 15,499SPX – 0.23 = 1685NAS + 9 = 362610 YR YLD – .03 = 2.58%OIL + 2.24 = 105.32GOLD – 3.50 = 1324.20SILV + .08 = 19.91 Here’s the scorecard as we wrap up the month of July. The Dow Jones Industrial Average is up 19.9% year to date, with about a 550 point gain for July. The S&P 500 is up 19.6% YTD, with a 70 point gain for the month. The Nasdaq Composite has a 20.9% YTD gain, with a 190 point gain for July. Ten year Treasury Yield is up about 10 basis points for the month and since the start of the year, yields have climbed from the 1.75% range to today’s close at 2.58%. Oil prices jumped from 97.88 at the start of the month to the current 105.32. And August gold futures bounced from the 1200 level to the current 1325. The stock market started today’s session with gains but could not hold on as the Federal Reserve FOMC wrapped up its two-day meeting by announcing they will stay the course, and will keep buying $85 billion a month in bonds to help lower long-term interest rates. And it says it plans to hold its key short-term rate at a record low near zero at least as long as the unemployment rate stays above 6.5 percent and the inflation outlook remains mild. They say the economy is growing only modestly, a downgrade from its …

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Financial Review

Financial Review for Tuesday, July 30, 2013 – The Bus Doesn’t Go There

The Bus Doesn’t Go There by Sinclair Noe DOW – 1 = 15,520SPX +0.63= 1685NAS + 17 = 361610 YR YLD + .01 = 2.61%OIL + .22 = 103.30GOLD – .50 = 1327.70SILV – .12 = 19.83 This might turn out to be a very interesting week, even if the markets were absolutely somnambulant today. Tomorrow morning we’ll get a report on second quarter gross domestic product and it is widely anticipated that it will show the economy growing at 1%, which is down from 1.8% in the first quarter and is generally pathetic, but remember that this number will then be revised a couple of times until they get it right. Tomorrow afternoon the FOMC will wrap up it’s two day meeting; Ben Bernanke will come down from his ivory tower and announce that the economy is modestly moderate and the Fed is watching it with keen interest and they will do whatever they do, which is more of the same depending upon economic conditions as seen from the long range telescope high atop their ivory tower. Of course, there is always the possibility the Fed could surprise us; they might take away the punchbowl and the kids on Wall Street might throw a temper tantrum and break your 401k, so we’ll all tune in tomorrow. Then on Friday we have the jobs report, which is the first Friday of each month. If there is strong jobs growth the kids on Wall Street might throw a temper tantrum and …

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Wednesday, June 26, 2013 – Still Some Work to be Done

Still Some Work to be Done by Sinclair Noe DOW + 149 = 14,910SPX + 15 = 1603NAS + 28 = 337610 YR YLD – .05 = 2.54%OIL + .17 = 95.49GOLD – 52.40 = 1226.20SILV – 1.12 = 18.62 Today we’ll cover the Supreme Court decisions, but first the economic news. As you know, the Commerce Department reports the Gross Domestic Product, or GDP of the nation on a quarterly basis. They issue an initial guesstimate, then they settle on a revised number; for example, they said the first quarter GDP was 2.4%; and then today, they revised the revision of the guesstimate. The economy did not grow at 2.4% in the first quarter, instead it was just anemic 1.8% growth. The latest numbers show that both consumer spending and trade were weaker than the earlier estimates showed. Consumers did not increase spending on health care, foods, hotel, travel, legal or personal care; big ticket purchases such as autos and electronics were flat. Investment in business structures including office buildings and plants dropped 8.3%; worse than the earlier estimates of 3.5%. Exports dropped 1.1% in the Q1; imports were down 0.4%. Now, the GDP numbers will be revised yet again. Every five years the Commerce Department overhauls GDP data to try and provide a more accurate picture of the economy; they’ll conduct that overhaul next month. And you may be wondering why this is important; after all, we’re talking about 1Q GDP and we’re almost finished with the second …

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Friday, April 26, 2013 – The Fix is In

The Fix is In by Sinclair Noe DOW + 11= 14,712SPX – 2 = 1582NAS – 10 = 327910 YR YLD – .05 = 1.66%OIL – .86 = 92.78GOLD – 5.30 = 1463.90SILV – .36 = 24.14 The initial guesstimate of first quarter gross domestic product shows the economy growing at a 2.5% pace. Consumer spending increased by 3.2%, the strongest increase in consumer spending in 2 years. Defense spending fell at an annual rate of 11.5 percent in the first quarter, on the heels of a 22.1 percent decline in the last three months of 2012. This is the initial report on GDP and it is subject to revisions. The initial fourth quarter GDP number came in at a negative 0.1% and was revised up to 0.4%; the first quarter estimate of 2.5% is well below expectations, and it certainly isn’t showing enough strength to indicate a solid recovery. Personal disposable income, today’s report shows, actually fell by $140 billion in total from the fourth quarter. Reversion of the payroll tax to its normal rates at the beginning of 2013 will continue to drag on the disposable income of middle-class consumers throughout the year. Business investment in productive equipment and IT — a driver of productivity, innovation, and employment — slowed markedly to 3% growth in the first quarter, relative to nearly 12% in the prior quarter. Residential investment maintained strong growth, however, expanding 13% as housing markets in many areas of the country seem to be turning up. …

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Wednesday, April 24, 2013 – God Bless the Child

God Bless the Child by Sinclair Noe DOW – 43 – 14,676SPX +.01 = 1578NAS +0.32 = 326910 YR YLD un = 1.70%OIL + 2.43 = 91.61GOLD + 17.90 = 1432.50SILV + .22 = 23.26 Them that’s got shall get; them that’s not shall lose; so the Bible said, and it still is news. The Pew Research Center has analyzed the most recent date from the Census Bureau, and it turns out the rich got richer and the poor got poorer. During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7% of the wealth distribution rose by an estimated 28%, while the mean net worth of households in the lower 93% dropped by 4%. From the end of the recession in 2009 through 2011 (the last year for which Census Bureau wealth data are available), the 8 million households in the US with a net worth above $836,033 saw their aggregate wealth rise by an estimated $5.6 trillion, while the 111 million households with a net worth at or below that level saw their aggregate wealth decline by an estimated $0.6 trillion. Because of these differences, wealth inequality increased during the first two years of the recovery. The upper 7% of households saw their aggregate share of the nation’s overall household wealth pie rise to 63% in 2011, up from 56% in 2009. On an individual household basis, the mean wealth of households in this more affluent group was almost …

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Thursday, February 28, 2013 – How Now, Dow Jones

I will be speaking at the 2013 Wealth Protection Conference in Tempe, AZ, April 5 & 6. For information please click here. This is an excellent conference. Hope to see you there. How Now, Dow Jones by Sinclair Noe DOW – 20 = 14,054SPX – 1 = 1514 NAS – 2 = 3160 10 YR YLD – .02 = 1.89%OIL – .91 = 91.85GOLD – 16.80 = 1580.50SILV – .47 = 28.61 Kate can now marry Herbert; or is it Charley? I don’t remember; the idea was part of a play from the late 60’s, called “How Now, Dow Jones” and the idea was that the girl had been engaged for about 4 years to a stock broker, and the guy was putting off marriage on the pretext of having to wait until the Dow Industrial hit a record high, which back then meant a move above 1,000. The Dow closed above 1,000 in November 1972, and then it floundered through the 70’s and didn’t close above 1,000 again until 1982. So, we didn’t hit the record high today. No milk and cookies. I don’t remember what happened to Kate. Records are made to be broken but its not easy. Even when the Federal Reserve is juicing the market, it isn’t easy. Records are may to be broken. It doesn’t happen when you expect. The Nasdaq is still some 38% below its all-time high of 5,132.50, which was hit on March 10, 2000. In inflation-adjusted terms, this market average is …

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Wednesday, January 30, 2013 – GDP Shrinks, Fed Stands Pat

GDP Shrinks, Fed Stands Pat by Sinclair Noe DOW – 44 = 13,910SPX – 5 = 1501NAS – 11 = 314210 YR YLD + .02 = 2.01OIL + .46 = 98.03GOLD + 12.50 = 1677.40SILV + .64 = 32.12 GDP shrank in the fourth quarter, and we had that report on the same day as the Fed wraps up an FOMC meeting. So, I’ve been reading a bunch o’ blogs and articles about how the Fed has been printing money, expanding its balance sheet to more than $3 trillion, failing to generate economic growth, failing to generate jobs, diluting the dollar, and generally condemning the American economy to the inevitable tortures of hyper-inflation. The internets are offering up the full spectrum of opinions: from the idea that the GDP Shows Federal Reserve Just Screwing the Average American to the apologetic Five Reasons the GDP Report is Misleading (hint: the economy will bounce back in a heartbeat, by golly gosh) to Fed Stays the Course: Is Its Monetary Policy Wrong? Let’s start with the GDP report. The economy shrank from October through December for the first time since the recession officially ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles. The Commerce Department said the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That’s a sharp slowdown from the 3.1 percent growth rate in the July-September quarter, and well below expectations of 1% growth. The …

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Tuesday, January 22, 2013 – Forward

Forward by Sinclair Noe DOW + 62 = 13,712SPX + 6 = 1492NAS + 8 = 314310 YR YLD – .01 = 1.84%OIL + .63 =96.67GOLD + 1.70 = 1692.80SILV + .19 = 32.31 Yesterday was a fairly momentous day; the second inauguration of President Obama, featuring a fairly important inaugural speech laying out the major themes and vision for the next four years; it was also Martin Luther King, Jr. Day. The inauguration was fun to watch; it was also infuriating, and not just because of the hours of fawning media coverage on Michelle Obama’s wardrobe. Literally, hours. Also a bit infuriating was the whole fuzzy picture of how the Inaugural was financed. The Presidential Inaugural Committee won’t say how much they have already collected or even what their goal was. Apparently these are “moving budgets,” which won’t stabilize until after the inauguration. Four years ago, promising a new openness, the president banned corporate giving to the inauguration, limited gifts from individuals to $50,000 and released a full accounting of donations. This year, the Inaugural Committee was offering packages between $10,000 and $1 million. Maybe you get a nice set of steak knives with the million dollar package. It will probably be a few months before we find out if they met their sales quota. Still, it was a nice inauguration and the President’s speech was interesting for multiple reasons. He hit on some big ideas: gay rights, climate change, immigration, and gun control. This weekend was also, by …

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Monday, December 3, 2012 – Still in the Woods and Other Economic News

Still in the Woods and Other Economic News by Sinclair Noe DOW – 59 = 12,965SPX – 6 = 1409NAS – 8 = 300210 YR YLD + .02 = 1.63%OIL +.01 = 88.92GOLD + .80 = 1717.00SILV + .22 = 33.76 Let’s start with the economic news. Business among manufacturers contracted in November and fell to the lowest level in more than three years. The Institute for Supply Management’s index of purchasing managers dropped to 49.5% from 51.7% in October. Any reading below 50 indicates contraction in the manufacturing sector. The decline in the overall ISM index largely reflected a steep drop in new orders but companies remained active fulfilling prior orders. Only six of the 18 U.S. manufacturing industries surveyed by ISM said they expanded somewhat faster in November. Nearly twice as many said their industries contracted. In the euro zone, manufacturers contracted for the 16th straight month, according to Markit. China’s manufacturing sector expanded slightly. In a separate report, the Commerce Department said spending on construction projects advanced 1.4% in October to the highest level since September 2009. The big economic news will come on Friday with the monthly jobs report. The best guess is that the economy added about 75,000 jobs in November, but that is just a guess; Hurricane Sandy has distorted some of the economic numbers. The fourth quarter of 2012 has clearly gotten off to a slow start. Consumer spending, by far the biggest source of economic growth, fell in October for the first …

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