Financial Review

Stagnation versus Innovation

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-04-07-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 5 = 17,875 SPX – 4 = 2076 NAS – 7 = 4910 10 YR YLD – .01 = 1.89% OIL + .94 = 53.08 GOLD – 6.30 = 1208.70 SILV – .14 = 16.93   The stock market was in positive territory almost all day, right until the very end of the session; it just slipped away. And that coincided with an American Petroleum Institute report showing crude oil inventories increased by 12.2 million barrels in the last week, about triple estimates. Not much economic news today. The Labor Department JOLT survey reports job openings rose to a 14-year high of 5.13 million in February from 4.97 million in January. There were 1.69 unemployed people for every opening in February. The quits rate slipped to 1.9% from 2%. This is good news; there are more jobs available, and people are quitting their current jobs because they have a level of confidence that they can find a new, better job.   Because this is a slow week for economic data, we will be hearing some opinions from the folks at the Federal Reserve. Minneapolis Fed President Narayana Kocherlakota laid out a case for waiting until the second half of 2016 to start raising rates, and to then raise them gradually so as to reach just 2 percent by the end of 2017. Some of the Fed’s more hawkish …

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Financial Review

Just Around the Corner

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-04-06-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe   DOW + 117 = 17,880 SPX + 13 = 2080 NAS + 30 = 4917 10 YR YLD un = 1.90% OIL + 2.84 = 51.98 GOLD + 12.00 = 1215.00 SILV + .20 = 17.07   The jobs report on Friday showed the economy added 126,000 nonfarm payroll jobs in March, the slowest monthly increase since December 2013, and the unemployment rate held at 5.5%. It was a bad jobs report; it raises concerns about a spring revival in the economy and should give the Fed cause to be more patient in initiating rate hikes.   New York Fed President William Dudley said the timing of interest rate hikes are uncertain and the Federal Reserve must watch that the surprising recent weakness in the economy does not foreshadow a more substantial slowdown, especially in the labor market. Dudley said: “It will be important to monitor developments to determine whether the softness in the March labor market report evident on Friday foreshadows a more substantial slowing in the labor market than I currently anticipate.” Still, Dudley said the weak economic data likely reflected “temporary factors to a significant degree.”   Maybe. There is still some question of whether the markets are pricing in higher rates. You can understand why markets might be slow to accept higher rates, like the kids in the back of the station wagon asking “are …

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Financial Review

Buckle Up

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-17-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 128 = 17,849 SPX – 6 = 2074 NAS + 7 = 4937 10 YR YLD – .04 = 2.06% OIL – .42 = 43.46 GOLD – 5.70 = 1149.60 SILV – .10 = 15.63   The FOMC will wrap up its two-day meeting on interest rate policy tomorrow. The key question: will the Fed give a hint about raising interest rates? IMF Director Christine Lagarde says even if the Fed is able to manage expectations about an interest rate hike, “the likely volatility in financial markets could give rise to potential stability risks.”   ECB President Mario Draghi says, “Most indicators suggest a sustained (eurozone) recovery is taking hold.”  Draghi is urging governments to use the brighter outlook to advance reforms that would improve the region’s long-term growth prospects. Draghi claims, “Confidence among firms and consumers is rising. Growth forecasts have been revised upwards. And bank lending is improving on both the demand and supply sides.”   Draghi sounds a little overly optimistic. A couple of weeks of bond buying have not changed the overall economies of the Eurozone. Unemployment is still rampant in Spain and Italy and Greece and Portugal and several other countries. No doubt QE is increasing liquidity in the sovereign debt markets; the private banking system are surely pleased with cheap money policy, but it hasn’t changed the jobs picture, it hasn’t resolved …

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Financial Review

Maybe GM Is Too Damn Stupid To Exist

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-12-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW + 259 = 17,895 SPX + 25 = 2065 NAS + 43 = 4893 10 YR YLD – .01 = 2.10% OIL – 1.14 = 47.03 Tuesday was one of the worst days for Wall Street in months; today we saw the biggest rally in a month. Go figure. The Dow and the S&P were up nearly 1.5%; the Nasdaq less of a gain as Intel warned that first-quarter sales would be below its previous outlook, given weaker-than-expected demand for business desktop PCs and lower inventory levels in the PC supply chain. Another day, another central bank jumps on the easing bandwagon.  South Korea joined twenty four countries across the globe by easing monetary policy in 2015. Taking advantage of low inflation, the Bank of Korea cut its base rate by 25 basis points to a record low of 1.75%. South Korea also previously cut its forecast for this year’s economic growth to 3.4% in January from 3.9%, and they are widely expected to lower it again next month as China’s growth continues to slow and much of Europe flounders.   The IMF has approved a bigger bailout for Ukraine, giving Kiev immediate access to $5 billion of the $17.5 billion in emergency funding to keep the country afloat. Kiev’s conflict with pro-Russian separatists has put the country’s economy into a tailspin with a plunging currency, the highest interest …

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Financial Review

Live Long and Prosper

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-02-27-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 81 = 18,132 SPX – 6 = 2104 NAS – 24 = 4963 10 YR YLD – .01 = 2.00% OIL + 1.03 = 49.20 GOLD + 4.50 = 1214.70 SILV + .04 = 16.67   We are wrapping up the first 2 months of trading. January was a down month for stocks, but February turned positive, with record high closes posted for the Dow, the S&P 500 and the Russell 2000. The Nasdaq went almost entirely green for the month, closing in on 5000, and actually setting a new monthly closing high, taking out the March 2000 monthly close of 4572.   For the month, the Dow Industrial Average gained 5.6%, the S&P 500 gained 5.5% and the Nasdaq added 7.1%, and the Russell 2000 added 5.8%. Year to date, , Dow Jones Industrial Average +1.7% YTD, S&P 500 +2.2% YTD, Nasdaq Composite +4.8% YTD,  and the Russell 2000 +2.4% YTD,   Junk bonds are poised to deliver gains of 2.3% for February, the best monthly result since 2013, while investment-grade debt has registered losses. Investors are also returning to the equity markets, with the MSCI All-Country World Index touching a record Thursday after two losing months. Markets in Germany, the United Kingdom and Sweden hit all-time highs. Japan, the poster child of deflation, saw its stock index reach its highest point in 15 years. This …

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Financial Review

Fed Should Avoid Knee Jerk Hikes

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-12-08-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 106 = 17,852 SPX – 15 = 2060 NAS – 40 = 4740 10 YR YLD – .05 = 2.26% OIL – 2.80 = 63.04 GOLD + 11.10 = 1205.20 SILV + .09 = 16.48 No records today. Energy stocks pulled the market lower; 42 of the 43 energy stocks in the S&P 500 posted losses today. Falling oil prices have also hit exchange rates of energy producers, especially in emerging markets. Russia’s ruble continues to slide, and an index tracking 20 key exchange rates has fallen to levels last seen more than a decade ago, down 10.2 percent this year and headed for the biggest annual slide since 2008. While some developing nations may welcome a weaker currency because it makes their exports more competitive, for others the pace of decline is destabilizing their economies by fueling inflation and eroding investor confidence. While the International Monetary Fund expects developing economies to pick up next year, it still sees them falling short of their longer-term growth. The IMF predicts expansion of 4.95 percent across emerging markets in 2015, up from a forecast of 4.43 percent this year and compared with average growth of 6.44 percent over the past decade. Let’s start with a quick recap of Friday’s jobs report. The economy added 321,000 jobs in November, well above estimates, the highest monthly gain since January 2010 and …

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Financial Review

Lather, Rinse, Repeat

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-04-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 17 = 17,383 SPX – 5 = 2012 NAS – 15 = 4623 10 YR YLD – .01 = 2.34% OIL – 1.31 = 77.47 GOLD + 2.90 = 1169.20 SILV – .11 = 16.13 Election Day 2014! We should all be very, very happy. Forget about red and blue, we can all count our blessings because the campaign ads on radio and TV are going away. There is one redeeming thing about this whole election. It will be over in a few hours. Say hallelujah! Or you could say that it’s amazing that anyone bothers to vote given that our choices are between tweedle dumb and tweedle dumber. Still, I went to the polls today, early, and I cast my ballot. I was the only voter voting. In a few hours we’ll get the results. And the most likely result is that not much will change, despite the drama and despite hundreds of millions to persuade you. It takes a fortune for a politician to get beat these days, but most of the money isn’t real, it’s magic money that doesn’t belong to anybody, or at least nobody is willing to admit they spend money on politics. We’ve got the best politicians money can buy. The present split Congress is the least-productive in US history. Regardless of the election’s outcome, the 114th Congress is unlikely to be any more …

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Financial Review

Forget Complacency

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-13-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 223 = 16,321 SPX – 31 = 1874 NAS – 62 = 4213 10 YR YLD closed 2.28% OIL – .69 = 85.05 GOLD + 14.10 = 1238.10 SILV + .10 = 17.60 The major indices were up and then down; small moves earlier in the session; then, in the final hour stocks slipped and kept falling. The S&P 500 has fallen 6.8 percent from its Sept. 18 record, making this the worst pullback in two-and-a-half years. The Russell 2000 sank 4.7 percent last week. The small-cap index entered a correction after sliding more than 10 percent from an all-time high in March. The Dow Jones Industrial Average has dropped 5.5 percent from its record last month, while the Nasdaq Composite Index has slumped 8.3 percent from a 14-year high reached in September. The Volatility Index, or VIX, rose 13 percent today to 24, the highest level since June 2012. Forget complacency. The final hour collapse coincided with a report that an Emirates Airline plane in Boston was surrounded by medical crews and they removed five passengers over concerns about Ebola. But there is more to today’s trading than an Ebola scare. Oil prices continued to slide. Saudi Arabia is saying they are comfortable with oil prices in the sub-$90 range. The Saudis don’t necessarily want prices to slide further, but they are unwilling to shoulder production cuts unilaterally and …

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Financial Review

King Dollar and the Eurozone

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-10-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 115 = 16,544 SPX – 22 = 1906 NAS – 102 = 4276 10 YR YLD – .02 = 2.30% OIL – .25 = 85.52 GOLD – .60 = 1224.00 SILV + .05 = 17.50 The 10 year German bund has a yield that is 141 basis points lower than the US 10 year Treasury note. The yield on German debt will get you 0.89%. Standard & Poor’s lowered France’s credit outlook today, and you can still get a 10 year French note with a yield of 1.25%. A 10 year note from Spain will only get you 2.06%. Is this because the US debt is riskier than the Spanish debt? No, just the opposite. The problem in the Eurozone is deflation, and it threatens to bring the economy to a grinding halt, and send the EU into a triple dip recession. The president of the European Central Bank, Mario Draghi, gave no indication of any further monetary stimulus beyond what was announced this summer, suggesting in a speech in Washington that governments needed to do more on the fiscal side. Draghi said in effect that Eurozone countries that have enough money should spend it, a clear reference to Germany. His comments echoed remarks this week from Christine Lagarde, the head of the International Monetary Fund. Today, German Chancellor Angela Merkel said her government was examining how to encourage investment, …

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Financial Review

Send Thank You Notes to Janet

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-08-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 274 = 16,994 SPX + 33 = 1968 NAS + 83 = 4468 10 YR YLD – .02 = 2.33% OIL – 1.23 = 87.62 GOLD + 13.20 = 1222.50 SILV + .19 = 17.48 Volatility has kicked into high gear. Yesterday the VIX, the Volatility Index was up 11%, and today it dropped 12%. The Dow has had moves of 200 points or more five times in the last 10 days. There have only been 10 other days this year when the index has made moves of that magnitude. Yesterday was an ugly decline and today, stocks started drifting lower, and then suddenly, dramatically, jumped higher; by the closing bell it was the best day of the year. Send your thank you notes to Janet Yellen. Pause for just a moment and think about what has been driving the markets for the past 5 years. Certainly, there are many factors but a big factor would have to be Federal Reserve monetary policy. Yesterday stocks looked like they were going to hell in a hand basket, and today the Fed’s FOMC minutes were released and the markets were revived as if they’d been given a big old hypodermic full of adrenaline straight to the heart. We all know the Fed is ending its bond buying crusade this month, and the open question has been when they will raise interest rates. …

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