Financial Review

The Day of Futures Past

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-21-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 10-21-2015   DOW – 48 = 17,168 SPX – 11 = 2018 NAS – 40 = 4840 10 YR YLD – .04 = 2.03% OIL – 1.08 = 45.21 GOLD – 9.10 = 1167.70 SILV – .22 = 15.78   Oil futures settled at their lowest level in nearly three weeks. OPEC is holding a special meeting in Vienna with cartel members and non-members Russia and Mexico to discuss ways to prop up oil prices. Don’t hold your breath. Meanwhile, the U.S. Energy Information Administration reported a much bigger than expected increase of eight million barrels in crude supplies for the past week.   The European Commission has ruled that Starbucks and Fiat Chrysler’s tax deals with the Netherlands and Luxembourg are illegal state aid, ordering the respective governments to recover as much as $34 million from each. The ruling follows an EU investigation launched in June 2014. It looked into whether the two companies were given so-called sweetheart tax deals that effectively lowered their corporate taxes.  Who’s up next? European regulators are finishing up investigations into McDonald’s and Amazon’s tax affairs in Luxembourg and Apple’s arrangements in Ireland.   Outgoing House Speaker John Boehner said Republicans will meet on Oct. 28 to nominate a candidate to replace him. Last night, Rep. Paul Ryan of Wisconsin said he would run for the job if certain conditions were met. With a critical …

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Financial Review

Zilch COLA

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-15-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 10-15-2015 DOW + 217 = 17,141 SPX + 29 = 2023 NAS + 87 = 4870 10 YR YLD + .04 = 2.20% OIL + .28 = 46.92 GOLD – .90 = 1184.40 SILV un = 16.22   The consumer price index, or prices at the retail level, declined by a seasonally adjusted 0.2% in September. Over the past 12 months inflation at the consumer level has shown zero increase. Inflation has fallen sharply over the past year mainly because of lower gasoline prices. The cost of gasoline fell 9% in September. The cost of food, however, rose 0.4% owing largely to higher prices for dairy, fruits and vegetables. Stripping out food and energy, the core CPI rose 0.2%. Core prices are up 1.9% over the past 12 months. Separately, the Energy Information Administration reports crude inventories rose by 7.6 million barrels in the last week, compared with analysts’ expectations for an increase of 2.8 million barrels.   Americans who collect Social Security won’t get an increase in their monthly checks in 2016. Annual increases in Social Security are made every year based on changes in a component of the consumer price index known as CPI-W. That index fell 0.4% in the period used by the government to calculate the annual increase in cost-of-living adjustments.   The CPI-W looks at prices for Urban Wage Earners and Clerical Workers; …

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Financial Review

Jobs Report Friday: meh

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-02-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe for 10-02-2015 DOW + 200 = 16,472 SPX + 27 = 1951 NAS + 80 = 4707 10 YR YLD – .05 = 1.99% OIL + .92 = 45.66 GOLD + 24.90 = 1139.40 SILV + .74 = 15.37   The economy added a seasonally adjusted 142,000 jobs in September, missing estimates by about 60,000. The unemployment rate was unchanged at 5.1%. More people dropped out of the labor force.   The Department of Labor revised the August employment numbers from 173,000, down to just 136,000.  The disappointing back-to-back employment reports were the worst pair in three years. Employment gains for July were also revised down from 245,000 to 223,000. The combined revisions for July and August lopped off 59,000 jobs from previous reports. Normally, the August jobs number is revised higher, not lower. Because of education related jobs and other variables, the August report has been notorious for upward revisions; typically at least 35,000 positions are added to the initial count. Not today. Six of the past eight reports have been revised lower in subsequent months.   Taken together, the three months averaged 167,000, a total that, while representing expansion, also signifies a major slowdown from the 260,000 per month clip for all of 2014. Moreover, at the beginning of the year, the three-month average was 312,000. Overall in 2015, job creation is now below the 200,000 milestone, …

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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: Apple Podcasts | 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 …

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Financial Review

The Deadline Is Near

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-05-28-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review by Sinclair Noe DOW – 36 = 18,126 SPX – 2 = 2120 NAS – 8 = 5097 10 YR YLD + .01 = 2.14% OIL + .46 = 57.97 GOLD – .02 = 1188.20 SILV + .01 = 16.76   The National Association of Realtors’ index of pending home sales increased in April for the fourth consecutive month to reach the highest level in nine years, signaling that upcoming deals could pick up. The pending home sales index climbed 3.4 percent to 112.4 last month. The index now is at its highest since May 2006.

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Financial Review

Sprinting Up a Mountain

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-14-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW – 18 = 17634 SPX + 0.49 = 2039.82 NAS + 8 = 4688 10 YR YLD – .02 = 2.32% OIL + 1.74 = 75.95 GOLD + 26.40 = 1189.30 SILV + .64 = 16.41 The recent rally in the S&P 500 has been really, really strong. Today marked the 41st record high close for the S&P. In mid-September, the index dropped, and that continued until October 16th. On October 17th we told you about a bullish reversal pattern, and since then the S&P 500 has gained about 160 points. The S&P 500 has traded above its 5 day moving average for 21 consecutive sessions; this is unusual; it means the rally has been extremely strong and nearly non-stop; there were a couple of days where the index paused, but never really went down. The past 21 days resulted in a 12% gain; that’s like a runner sprinting up a mountain. The market is now extremely overbought. Typically, when the market is overbought, you might anticipate a pullback. We haven’t seen it yet, but we can anticipate and wait for the market to show us. There are plenty of reasons to think the stock market will continue higher. First reason is that it is in an uptrend right now; a trend in place is more likely to continue than it is to reverse. Another reason is that there is a …

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Financial Review

A Solid Week in a Rocky Month

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-10-24-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: Apple Podcasts | Android | RSSFinancial Review DOW + 127 = 16,805 SPX + 13 = 1964 NAS + 30 = 4483 10 YR YLD – .01 = 2.27% OIL – .80 = 81.29 GOLD – .90 = 1232.00 SILV + .01 = 17.31 Last Friday we covered some technical analysis of the equity markets, looking at support and resistance, as well as a short-term bullish pattern, a morning star that had formed. Sure enough, this week provided the follow through on that bullish pattern. Major indices snapped a 4-week string of losses. For the week, the Dow gained 425 points, or 2.5%. The S&P gained 78 points, or 4.1%. And the weekly gain for the Nasdaq was 225 points or 5.2%. So, where do the markets go from here? The pullback that started September 19th never really materialized into a full blown correction, and there is a feeling that there should be more to the downside, but as of today the markets seem to be firmly in retracement mode. Better to let the market tell you when that retracement ends than to try to impose your opinions on the market. And then remember that we are almost through the treacherous month of October. The Stock Traders’ Almanac reminds us that “in 64 years before 2014, DJIA and S&P 500 have both declined 26 times in October. However, these October declines were followed by 23 DJIA November-December gains averaging …

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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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Wednesday, January 22, 2014 – A Mixed Bag

A Mixed Bag by Sinclair Noe DOW – 41 = 16,373SPX + 1 = 1844NAS + 17 = 424310 YR YLD + .04 = 2.86%OIL + 1.69 = 96.66GOLD – 3.80 = 1237.80SILV – .07 = 19.90 Another mixed day on Wall Street. It’s earnings season. IBM reported quarterly revenue that missed estimates for the fourth straight quarter, due to a steep fall in demand for servers and storage products in emerging markets such as China. IBM thinks part of the reason for declining revenue was backlash from emerging economies against US government spying. IBM was down enough to drag the Dow Industrials into negative territory for the day. Coach, the handbag maker, was the biggest loser in the S&P 500 after posting disappointing sales in North America. United Technologies, the air conditioner and elevator company, reported higher fourth-quarter profit that topped Wall Street estimates, though revenue fell shy of expectations. Norfolk Southern posted a 24 percent rise in quarterly income. After the close, Netflix reported higher profit for the fourth quarter as the company added 2.3 million customers to its TV and movie streaming service in the United States. A mixed bag of earnings today. Not much to cause the bulls or the bears to run. Target Corp said it will stop offering health coverage to part-time workers, citing new public insurance exchanges floated by the US government. Less than 10 percent of the company’s 361,000 employees currently participate in the insurance plan that is being discontinued. Target is …

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Monday, October 07, 2013 – Already Bankrupt

Already Bankrupt by Sinclair Noe DOW – 136 = 14, 936 SPX – 14 = 1676NAS – 37 = 377010 YR YLD – .02 = 2.63%OIL – .67 = 103.17GOLD + 11.20 = 1323.40SILV + .61 = 22.45 The markets gave up Friday’s gains. The political dysfunction is hurting; right now it’s just the economic uncertainty; that’s a phrase I hate because businesses always face uncertainty but the shutdown and the looming debt ceiling are significant uncertainties. Let’s start with the debt ceiling. Businessweek is describing it as “an economic calamity like none the world has ever seen.” Here’s the not so rosy scenario: “Failure by the world’s largest borrower to pay its debt — unprecedented in modern history — will devastate stock markets from Brazil to Zurich, halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression. Among the dozens of money managers, economists, bankers, traders and former government officials interviewed for this story, few view a U.S. default as anything but a financial apocalypse. “ Sure, if the US misses a payment it would be much bigger than 2008 because the US government is so much bigger and more interconnected than Lehman Brothers; and after the collapse of Lehman, the government stepped in to clean up the mess. Who cleans up the mess when the mess is …

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Friday, August 23, 2013 – QE Giveth and QE Taketh

QE Giveth and QE Taketh by Sinclair Noe DOW + 46 = 15,010SPX + 6 = 1663NAS + 19 = 365710 YR YLD – .08 = 2.82%OIL + 1.39 = 106.42GOLD + 21.70 = 1398.80SILV + .90 = 24.18 Yesterday, the Nasdaq crashed for about 3 hours; trading was halted; we still don’t know why. It now has a snappy name, the Flash Freeze. It happened after shares of Apple got stuck at $498, then everything froze. In time we’ll hear a good story about why it happened. My best guess for now is that it has to do with high frequency traders; the algo traders have a tendency to clog the trading pipes with all their bids, offers, and canceled orders as they try to scalp and front run trades. The market exchanges claim the high frequency traders provide liquidity, but I didn’t see any liquidity for about 3 hours yesterday; zip, nada. The markets had a pleasant and quiet day today, following a couple of weeks of fretting about Fed taper. America has created a whopping entitlement for the biggest Wall Street banks and their top executives, who, unlike most of the rest of us, are no longer allowed to fail. They can borrow from the Fed at almost no cost, then lend out the money at 3 percent to 6 percent or 30 percent; or they can take the money and gamble in markets they have rigged: derivatives, interest rates, energy, aluminum. It’s all rigged; the big …

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Monday, June 17, 2013 – Preaching, Practicing, and Doing

Preaching, Practicing, and Doing by Sinclair Noe DOW + 109 = 15,179SPX + 12 = 1639NAS + 28 = 345210 YR YLD + .05 = 2.17%OIL + .07 = 97.92GOLD – 6.80 = 1385.70SILV – .24 = 21.94 President Obama is in Northern Ireland today, part of a three-day European tour that includes a G-8 summit meeting. Maybe we could call this the “Practice what I preach, not what I practice Tour”. Obama kicked off the tour with a speech in Belfast to celebrate Northern Ireland’s peace process; later he’ll talk with Euro leaders, including Russian President Putin about lifting a European arms embargo to arm Syrian rebels. The G-8 summit generally deals with economic issues, and tops on the list will be tax evasion. The Brits, lead by David Cameron and George Osborne will pressure for a comprehensive deal to include developing countries while preventing developed countries from trying to water down proposals. The two big ideas include having the beneficial ownership of offshore accounts made public and then having the G-8 countries commit to a global agreement on exchange of tax information that developing countries can join. The concern for poorer countries is that the G8 will deliver a “gold standard” for itself but offer a less satisfactory agreement for poor countries, which lose three times as much in tax evasion as they gain from aid. The Syrian conflict might actually be a positive for pushing through a deal on tax havens. It is unlikely there will be an …

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Wednesday, April 10, 2013 – The Real Question on the Economy

The Real Question on the Economy by Sinclair Noe DOW + 128 = 14, 802SPX + 19 = 1587NAS + 59 = 329710 YR YLD +.06 = 1.80%OIL +.35 = 94.55GOLD – 25.70 = 1560.30SILV – .33 = 27.75 The Federal Reserve released the minutes of their Federal Open Market Committee meeting held March 19-20. The minutes leaked out 5 hours early. The Fed inadvertently sent the report to congressional aides and trade organizations yesterday, and since the details are actually trade-able information, they had to make it public quicker than not. Make no mistake, this was a serious breach of protocol. Once the minutes were made public, it depressed bond prices, mainly because of disagreements among the Fed’s 19 policymakers about carrying on with buying $85 billion in Treasury and mortgage bonds per month to stimulate the economy. Of the 12 officials who have a vote on monetary policy this year, “a few” expected to taper the purchases around midyear and to end them later this year. “Several others thought that if the outlook for labor market conditions improved as anticipated, it would probably be appropriate to slow purchases later in the year and to stop them by year-end.” Proving once again that the prognosticating skills of the Federal Reserve are roughly equal to the singing skills of a fish on a bicycle. Just like the release of the minutes, their ideas about exiting QE seem a bit premature, especially in light of last week’s jobs report, which you …

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Friday, January 11, 2013 – Meet the New Boss

Meet the New Boss by Sinclair Noe DOW + 17 = 13,488SPX -.07 = 1472NAS + 3 = 312510 YR YLD – .02 = 1.88%OIL -.06 = 93.76GOLD – 12.10 = 1663.70SILV – .42 = 30.54 Within a few days, Tim Geithner will be gone from the Treasury. Geithner was at the center of the financial crisis, first in his role as President of the Federal Reserve Bank of New York and in 2009 as Treasury Secretary. In a recent exit interview he said: “It was a very bad crisis. No playbook. No road map. No clear precedent. If we had a different set of constraints, particularly in fiscal policy, then I think that the economic outcome could have been modestly better.” To be fair, Geithner was handed a mess, and to his credit he did not turn it into a catastrophe, and there were constraints. Still, Geithner’s tenure at Treasury has been a little less than satisfying. The Too Big to Fail banks are bigger than ever; they operate with an explicit public guarantee, and despite Geithner’s dissatisfaction with constraints placed on him, he did little to challenge the banksters. Geithner quashed proposals to seize bonuses, impose new taxes or otherwise punish bankers. He claimed that it would have destabilized the banks; instead he created a moral hazard and a two-tiered system of justice; Too Big to Fail became Too Big to Jail and the result is the banksters now operate with impunity. At the same time Geithner was …

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Wednesday, January 09, 2013 – Miscellaneous Financial News

Miscellaneous Financial Newsby Sinclair Noe DOW + 61 = 13,390SPX + 3 = 1461NAS + 61 = 13,39010 YR YLD -.02 = 1.85%OIL +.01 = 93.16GOLD – 2.80 = 1659.00SILV – .05 = 30.46 AIG, the insurance company won’t join ex-CEO Maurice “Hank” Greenberg’s lawsuit against the US government over the insurance giant’s financial crisis bailout. Greenberg has filed a $25 billion lawsuit accusing the government of violating shareholders’ rights by bailing out AIG, because the terms of the bailout weren’t as cushy as Greenberg wanted. Thank you, AIG. Earlier this week I told you about an $8.5 billion settlement announced between the Federal Reserve and the Office of the Comptroller of the Currency with 10 big mortgage services, including Citigroup, JPMorgan and Wells Fargo over botched foreclosure claims. Now, Goldman Sachs and Morgan Stanley and other banks are expected to agree to a $1.5 billion settlement with the regulators sometime this week. The other banks haven’t been officially identified but best guess is that the group includes HSBC, Ally, EverBank, and OneWest Bank. Goldman got into the mortgage servicing business by purchased Litton Loan Servicing and Morgan Stanley bought Saxon Capital. The Fed has ordered both firms to conduct case by case reviews of foreclosures after widespread mistakes were discovered in how the firms processed home seizures. Meanwhile, Morgan Stanley plans to cut about 1,600 jobs, nearly 3 percent of its workforce. The cuts will focus on senior ranks at the bank. About half of the cuts will be …

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