Financial Review

Tail of the Put

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-12-30-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 12-30-2015 DOW – 117 = 17,603 SPX – 15 =  2063 NAS – 42 = 5065 10 Y – .01 = 2.30% OIL – 1.07 = 36.80 GOLD – 7.90 = 1062.10 I was away on vacation on December 16th when the Fed raised interest rates, so I want to start today by going back and taking a look at what that really means and how it might affect the economy and the markets moving into the New Year. First, let’s be clear; the Fed did not raise rates on December 16th; the Fed raised their target for the fed funds rate, which is the rate at which banks lend to each other.  That’s a technicality. The Fed will buy and sell securities to increase the cost of borrowing money across the banking system. So money is becoming more expensive for all financial institutions. And the banks and financial institutions then pass along those cost to their customers in the form of higher interest rates. Short-term and long-term rates will move higher, at least in theory, but in reality, they don’t always move higher in lockstep.   And the dollar should get even stronger as rates move higher on Treasuries and corporate bonds. The reason is simple; if you are a foreign investor and you want to buy debt that offers a higher rate you first have to trade …

READ MORE →
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 …

READ MORE →
Financial Review

Close Calls

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-07-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 10-07-2015 DOW + 122 = 16,912 SPX + 15 = 1995 NAS + 42 = 4791 10 YR YLD + .03 = 2.06% OIL – .47 = 48.06 GOLD – 1.80 = 1146.80 SILV + .17 = 16.15   The S&P 500 closed at its highest level in three weeks. The S&P 500 has been up for 6 out of the past 7 sessions.  The S&P is down 3.09 percent for the year and the Dow is off by 5.11 percent ytd.   Yesterday, oil prices jumped nearly 5% as the American Petroleum Institute reported a 1.2 million barrel decrease in crude stocks last week. The International Energy Agency has said it expects world oil demand to increase by around 1.7 million barrels per day this year, one of the fastest rates for years as consumers respond to much lower fuel prices. The tightening market balance comes as U.S. production starts to decline. This morning, the Energy Information Administration reports global oil demand should increase by its fastest rate in six years in 2016, suggesting a surplus of crude is easing more quickly than expected. The EIA forecasts U.S. oil output will fall to 8.8 million barrels per day from an average of 9.25 million in 2015. But the EIA report also showed U.S. crude inventories rose by 3.1 million barrels in the last week, compared with analysts’ expectations for …

READ MORE →
Financial Review

Times Change

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-30-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 09-30-2015   DOW + 235 = 16,284 SPX + 35 = 1920 NAS + 102 = 4620 10 YR YLD + .01 = 2.06% OIL – .14 = 45.09 GOLD – 12.40 = 1116.30 SILV – .13 = 14.62   This is the last trading day of the third quarter. China’s main stock market posted its worst quarter since 2008 and its smaller Shenzhen index, posted its worst quarter in at least two decades. Markets in Singapore and Indonesia are set to post their worst quarters since the financial crisis. The MSCI Asia ex-Japan Index fell 19.1% from the beginning of the quarter. The Nikkei closed out its worst quarter since 2010 and the ASX its worst since 2011.   European stocks moved higher today, but not enough to recover from the worst quarter in 4 years. The Stoxx Europe 600 index is down about 9.5% for the quarter. Germany’s DAX index down 12% for the quarter. France’s CAC index posted a quarterly loss of 7.3%, and the UK’s FTSE 100 down 7.7%. The Eurozone is back in deflation. Consumer prices slipped 0.1% year-over-year in September.   The major U.S. averages had a rough third quarter. Concerns about spillover from slowdown in China and the timing of a Federal Reserve rate hike sent markets into correction territory, or more than 10 percent below their 52-week highs, in late August. The …

READ MORE →
Financial Review

Canoe Trips on Mars

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-28-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 09-28-2015   DOW – 312 = 16,001 SPX – 49 = 1881 NAS – 142 = 4543 10 YR YLD – .07 = 2.09% OIL – .03 = 44.40 GOLD – 14.20 = 1133.10 SILV – .53 = 14.70   Well, this was just ugly. All three major indices traded in correction territory today or more than 10 percent below their 52-week highs. For the Nasdaq Composite, the 50 day moving average crossed the 200 day moving average, forming a pattern that goes by the catchy name “death cross”. The Nasdaq Biotechnology ETF closed down 6.3%, following a 5% drop on Friday.   Shares in mining and trading company Glencore fell almost 30 percent and closed at a record low, wiping out more than $5 billion in market valuation. The fall followed publication of a note by analysts at investment bank Investec which raised doubts about Glencore’s valuation if spot metal prices do not improve. The note pointed to high debt levels and a need for deeper restructuring. The analysts wrote: “If major commodity prices remain at current levels, our analysis implies that, in the absence of substantial restructuring, nearly all the equity value of both Glencore and Anglo American could evaporate.” Glencore, a Swiss based company, has said it will suspend dividends, sell assets and raise cash with a $2.5 billion share placement, among other measures, to cut its $30 …

READ MORE →
Financial Review

Sliding Into the Close

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-09-03-2015.mp3Podcast: Play in new window | Download (Duration: 13:14 — 12.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 09-03-20015   DOW + 23 = 16,374 SPX + 2 = 1951 NAS – 16 = 4733 10 YR YLD – .03 = 2.17% OIL – .12 = 46.63 GOLD – 8.70 = 1126.00 SILV + .03 = 14.83   Wall Street started the session on a high note, but could not hold it. Stocks slipped into the close and the Nasdaq turned red for the day. The stakes couldn’t be higher for the tomorrow morning’s August employment report, even though the month has typically been cursed by disappointment. The consensus guesstimate calls for about 215,000 to 220,000 new jobs created in August, with the unemployment rate holding at 5.3%, but August is notorious for misses. From 2005 to 2014, forecasters have over-estimated the initial August payrolls print seven times, including in each of the past four years. What’s more, the Labor Department (excluding annual and benchmark revisions) has marked up its first estimate in subsequent months in eight of the past 10 years. Part of the puzzle of forecasting August payrolls is the difficulty in adjusting for annual changes in the school-year calendar. Financial-market turmoil, at least, probably did little to impact hiring decisions in August. The government surveys households and businesses in the week that contains the 12th of the month, so the data will reflect responses covering the Aug. 9-15 period; that was a few days before the market rollercoaster …

READ MORE →
Financial Review

Sunlight is the Best Disinfectant

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-08-05-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe for 08-05-2015 DOW – 10 = 17,540 SPX + 6 = 2099 NAS + 34 = 5139 10 YR YLD + .06 = 2.27% OIL – .59 = 45.15 GOLD – 3.00 = 1085.50 SILV + .02 = 14.69   Private-sector hiring slowed in July. Employers added 185,000 private-sector jobs in July, down from 229,000 jobs in June, and below the average pace for the past six months. Gains slowed across all size-firms except large firms in July. Manufacturing employment has slowed sharply since the beginning of the year. The ADP report sometimes offers a hint of what we might expect from the monthly government report on jobs, which will be released Friday. Strength or weakness in the labor market is thought to be a key factor in the Federal Reserve’s decision to possibly hike interest rates in September.   The Institute for Supply Management said its services index surged to 60.3% from a 56% reading in June. Any reading above 50% indicates expansion. It was the highest reading since 2005. The business activity and new orders components both were over 60%, and the employment index increased 6.9 percentage points to 59.6%. We’ll have more details on the ISM report in our next segment.   Atlanta Fed President Dennis Lockhart said it would take “significant deterioration” in the U.S. economy for him to not support a rate hike in September. …

READ MORE →
Financial Review

Blue Moon

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-07-31-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW – 56 = 17,689 SPX – 4 = 2103 NAS – 0.5 = 5128 10 YR YLD – .07 = 2.20% OIL – 1.64 = 46.88 GOLD + 7.10 = 1096.40 SILV + .04 = 14.87   For the week the S&P 500 index gained 1.2%, while posting a 2% gain for the month of July. The Dow Industrials finished the week with a 0.7% gain which lifted the monthly gain to 0.4%. The Nasdaq was up 0.8% for the weeks and 2.9% for the month. For the month, the yield on the 10 year Treasury dropped 13 basis points. Spot gold dropped 6% for the month and silver was down 5%. The big decline came in oil prices: down 12.59 per barrel or 21% for the month. Consumer sentiment fell to a final July reading of 93.1 from a final June level of 96.1. For context, the consumer-sentiment gauge averaged 86.9 over the year leading up to the recession. After adjusting for changes in prices, just three in 10 surveyed thought their chances were better than 50 percent for real income gains over the next five years. Call it the voice of experience.   An index that measures the price of US labor slowed sharply in the second quarter, easing fears of inflation and signaling the labor market may not be as healthy as the low unemployment rate …

READ MORE →
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: iTunes | 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 outbreak …

READ MORE →
Financial Review

Endless Possibilities

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-07-15-2015.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW – 3 = 18,050 SPX – 1 = 2107 NAS – 5 = 5098 10 YR YLD – .05 = 2.35% OIL – 1.43 = 51.61 GOLD – 5.90 = 1149.90 SILV –  .28 = 15.19   I think the markets couldn’t quite figure out what to make of today.   In the late 1970s Sen. Hubert Humphrey and Rep. Augustus Hawkins sponsored legislation known as the Full Employment and Balanced Growth Act of 1978. The idea was to set monetary policy to try to achieve the goals of full employment, growth in production, price stability, and balance of trade and the budget. The Act also required the Federal Open Market Committee to report to Congress twice a year, in February and July; we used to call it the Humphrey-Hawkins testimony.   Testimony coincides with the publication of the Fed’s Beige Book, which was released today. The Beige Book cited improving consumer spending, mixed activity for transportation, positive reports on real estate, increasing lending activity, and “modest” wage pressures. The report did reveal trouble spots, such as the strengthening dollar, which led to soft growth around border areas, and the decline in oil and natural gas drilling.   The Humphrey-Hawkins Act expired about 10 years ago; perhaps because the goals of full employment, balanced budgets and balanced trade seem like Utopian pipedreams, but the Fed chair still heads to …

READ MORE →