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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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Thursday, November 29,2012 – Place Your Bets

Place Your Bets by Sinclair Noe Let’s start with the important numbers today: 5, 16, 22, 23, 29, and the Powerball 6. And I did not win. Somebody in Missouri and somebody in Phoenix are holding the winning tickets. Not me. All I’m holding is a $10 piece of paper which is my donation to the tax fund for the mathematically challenged. DOW + 36 = 13,021SPX + 6 = 1415 NAS + 20 = 301210 YR YLD un = 1.62%OIL + 1.23 = 87.72GOLD + 6.00 = 1726.80SILV + .50 = 34.27 The U.S. economy grew at a 2.7 percent annual rate from July through September, much faster than first thought. The Commerce Department said growth in the third quarter was significantly better than the 2 percent rate estimated a month ago. And it was more than twice the 1.3 percent rate reported for the April-June quarter. The main reason for the upward revision to the gross domestic product was businesses restocked at a faster pace than previously estimated. That offset weaker consumer spending growth. The fourth quarter GDP is expected to drop back down below 2 percent because of Hurricane Sandy, which put the brakes on all sorts of business activity along the East Coast. And then the other reason cited for the possible fourth quarter slowdown is the fiscal cliff. (Sorry, we just can’t get through the day without talking about it.) So, here is the annotated version of today’s fiscal cliff report: a little partisan sniping, …

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Friday, October 26, 2012 – Thank God It’s Friday

DOW + 3 = 13,107SPX – 1 = 1411NAS – 1 = 298710 YR YLD – .08 = 1.75%OIL -.43 = 88.30GOLD + .80 = 1712.10SILV – .02 = 32.19 PLAT – 16.00 = 1551.00 The U.S. economy grew in the third quarter, the GDP grew at a 2% rate, a bit stronger than the 1.7% expected by economists, and up from the 1.3% rate in the second quarter. Consumer spending and federal government spending increased and the housing market and home construction were areas of strength. Business spending continued to be a drag. GDP is the broadest measure of an economy’s health, and represents the value of all goods and services produced in the US. GDP has been positive since the third quarter of 2009, but today’s report, although better than expected, really can’t be considered more than moderate growth. Consumer spending increased at a 2% pace. Business investment fell by 1.3% in the third quarter, subtracting 0.1 percentage points from growth. Farm inventories dropped due to the drought and that subtracted 0.4 percentage points from GDP growth. Government spending increased 3.7%, with the lions’ share coming from the federal government and a fairly flat spending pattern from local governments. Investment in the housing sector jumped 14.4%. Inflation as measured by the Consumer PCE or Personal Consumption Expenditures Index increased to 1.8% from 0.7% in the second quarter; most of that increase was due to high gasoline prices, which have started moving lower in the current quarter. Imports dipped …

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Wednesday, August 29, 2012 – Today’s Debt and GDP

Today’s Debt and GDP  By Sinclair Noe DOW + 4 = 13, 107SPX + 1 = 1410NAS + 4 = 308110 Yr Yld +.02 = 1.65% OIL – 1.02 = 96.80GOLD – 10.50 = 1657.10SILV – .17 = 30.83PLAT – 3.00 = 1521.00 The month of August has been basically flat, looking at the major market indices, just a couple of points movement. You may recall that last March I was warning you about the worst six months in the market, the old idea of “sell in May and stay away”. On May 1st, the S&P 500 closed at 1405. So, if you did get out in May, you’re doing O.K. Of course, the theory looks at the worst and best six months of the market, and based upon that you would avoid the market volatility in September and October. September is historically the worst month for stocks. The Dow Industrial Average has declined 1.4 percent on average in September since 1929. Taking a broader look at the market, September is by far the worst month for the S&P 500. It has posted an average decline of 1.3 percent since 1929. Over that period, it’s the only month to drop more than 50 percent of the time. Of course, there are no guarantees in the stock market; might go up, might go down; but I think it’s a safe bet that the lazy, hazy days of summer will give way to more volume and more volatility and it could start …

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Friday, July 27, 2012 – Wall Street Finds Pleasure in GDP Pain

Wall Street Finds Pleasure in GDP Pain-by Sinclair NoeDOW + 187 = 13,075SPX + 25 = 1385NAS + 64 = 295810 YR YLD +.13 = 1.56%OIL + .91 = 91.98GOLD + 7.50 = 1624.60SILV +.25 = 27.89PLAT + 6.00 = 1417.00All right class; Pop Quiz. Question: What does Wall Street love? Answer: Free money. I know, it’s the same pop quiz as yesterday. That was then and this is now. Yesterday, the free money was coming from the ECB, as Mario Draghi promised to do whatever it takes to save the euro. Today came news that was so bad that it should push Federal Reserve Chairman Ben Bernanke out of denial and into action. Economic growth was so stagnant that Bernanke will be forced to pass out free money to his bankster buddies; it’s not the solution but it is what Bernanke knows how to do. The nation’s gross domestic product, the broadest measure of the economy, grew at just 1.5% in the second quarter; that compares to GDP growth of 2% in the first quarter and 4.1% growth in the fourth quarter of 2011. Consumers cut back, local governments cut spending, factories received fewer orders and exports declined because of the global slowdown and a stronger dollar. Spending on durable goods, including things like cars and home appliances, fell 1.% in the second quarter. Cuts in government spending, especially at the local level, also held back growth. State and local spending fell 2.1% during the quarter while federal spending declined 0.4%. …

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Wednesday, May 02, 2012 – Jobs Report, Euro Elections, California Budget, and Watching Paint Dry

DOW – 10 = 13,268SPX – 3 = 1402 NAS + 9 = 305910 YR YLD -.03 = 1.92OIL +.14 = 105.36GOLD – 8.50 = 1654.70SILV – .32 = 30.75PLAT – 9.00 = 1569.00 This is shaping up to be a wild weekend. Friday we get the jobs report. Then, in Europe there will be elections in France and Greece. On a personal note, I’m going to paint the patio on my house, so I’ll be watching paint dry, just to counterbalance the rest of the world. The monthly jobs report, already the most highly anticipated data of the month, will be getting a little extra attention this Friday after a disappointing report on GDP late last week. A bad jobs report and a weak GDP report might be enough to trigger another round of Quantitative Easing from the Federal Reserve. The economy is adding and will continue to add jobs; that is not in question. It is the rate of job growth. Expectations are that there were about 160k to 175k new jobs created in April, up from 120,000 in March, and an unemployment rate that remains steady at 8.2%. The lowball guesses are for only about 125k jobs. With the addition of 120,000 jobs, March marked the 15th straight month of jobs growth, but it broke a three-month streak in which the economy had added more than 200,000 jobs. Now we are only a couple days away from finding out whether March’s report was a fluke or the …

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Friday, April 27, 2012 – Falling Down: US GDP, Spain, & Romania

DOW + 23 = 13,228SPX + 3 = 1403NAS + 18 = 306910 Yr yld -.03 = 1.93%OIL +.26 = 104.81GOLD  + 5.70 = 1663.80SILV + .18 = 31.37PLAT + 4.00 = 1579.00 This week was the best week in about one month for the major stock averages. Amazon climbed 15.7 percent to $226.85 and contributed half of Nasdaq’s gain for the day. The S&P retail index rose 3.5 percent and hit an all-time high. Shares of Expedia, the Web-based travel provider, surged 23.5 percent to close at $40.31, after hitting a new high at $43 on record volume. Growth in S&P 500 earnings rose to 7.2 percent this week from 3.2 percent at the start of the month. About 73 percent of the companies that have reported so far have beaten expectations. Earlier this week, a blowout quarter from Apple Inc gave the Nasdaq its best day of the year .  The S&P 500 is up 11.6 percent for the year.  Pay no attention to the Commerce Department report behind the curtain of the Wall Street indices.  The report says the U.S. economy expanded at a 2.2 percent annual rate in the first quarter, far below expectations for growth of 2.5 percent. Growth of 2.2% is mediocre, but it’s worse than that once you peel away a few layers — about a fourth of the growth in gross domestic product was accounted for by a buildup in inventories, and half of it came from the building and selling of motor vehicles. …

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