Financial Review

A Low Bar

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-04-20-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 208 = 18,034 SPX + 19 = 2100 NAS + 62 = 4994 10 YR YLD + .05 = 1.90% OIL + .76 = 56.50 No major economic data published today. The global markets have been focused on China and Greece. China is changing regulations and adding stimulus to try and prop up the economy, even as some of their big real estate development companies are staring down defaults. The problem with Greece is that they are ready to default; payments are due at the end of the week and they are scrambling for cash. Perhaps more importantly, earnings season will kick into high gear this week. Maybe all that will take a backseat to a facedown off the shore of Yemen. The US Navy has sent an aircraft carrier and a guided-missile cruiser into the waters near Yemen to conduct maritime security operations, and not to intercept Iranian arms shipments. It’s believed there are 9 US ships in the region, including cruisers and destroyers. It is further believed the Iranian Navy has sent up to 5 ships full of weapons bound for Houthi rebels in Yemen. Yea, what could go wrong?   Following soft GDP data last week, China’s central bank cut the reserve requirement ratio for all banks by 100 basis points to 18.5% yesterday, adding about $200 billion in liquidity for banks to lend. Last Friday, …

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Financial Review

Transitory, Not Terminal

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-23-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW – 11 = 18,116 SPX – 3 = 2104 NAS – 15 = 5010 10 YR YLD – .01 = 1.91% OIL + .88 = 47.45 GOLD + 6.90 = 1190.30 SILV + .25 = 17.08   The Dow Jones Industrial Average is still above 18,000. The Nasdaq Composite is above 5,000. The Russell 2000 is near record highs. Japan’s Nikkei 225 Composite, which dipped below 17,000 early in the year, took about a month to surge from 18,000 to 19,000 and is now rapidly approaching the 20,000 level; heights that haven’t been seen since 2000. Germany’s DAX recently traded above 12,000 for the first time and is up nearly 30 percent from the lows set earlier this year. London’s FTSE 100 is over 7,000, at its highest level in 15 years. Central bank monetary easing seems to be having the desired effect of pumping up financial assets around the globe, and even if the Fed is talking about hiking rates in the US, we haven’t seen a serious rate hike tantrum on Wall Street, yet.   U.S. home resales rebounded less than expected in February. The National Association of Realtors said that existing home sales rose 1.2% to an annual rate of 4.88 million units. Inventories are tight and also sales were hurt by harsh winter weather in the Northeast, where sales dropped 6.5%; sales were up 5.7% …

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Financial Review

Sparks Turn into Flames

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-03-05-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 38 = 18,135 SPX + 2 = 2101 NAS + 15 = 4982 10 YR YLD – .01 = 2.11% OIL – .59 = 50.94 GOLD SILV   Productivity in the fourth quarter fell at a revised 2.2% annual pace. The Labor Department originally estimated that productivity fell 1.8% in the final three months of 2014.   The number of people who applied for new unemployment benefits climbed by 7,000 to 320,000 for the week ended February 28. New applications for unemployment benefits are 1.5% below year-ago levels.   Of course the big economic news is tomorrow morning when we get the monthly jobs report. A month ago, the report showed the economy added 257,000 net new jobs in January. The estimate for February is 235,000 new jobs. It would be a bit of a surprise if the number is stronger than expected. Earlier in the week the ISM report showed employment was still expanding, but at a slower pace; they cited the West Coast port slowdown. Meanwhile, the rest of the country has experienced bad weather in February. Overall, the labor market looks to be improving, slowly.   Last month, Walmart made headlines by announcing it would be hiking wages for a significant chunk of its hourly workforce, boosting its minimum hourly rate to $10 by next year. What was behind the move? Yesterday’s Beige Book may provide a clue. The report says employers …

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Financial Review

Friday Wrap

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-2-01-23-2015.mp3Podcast: Play in new window | Download (Duration: 20:25 — 9.3MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW – 141 = 17,672 SPX – 11 = 2051 NAS + 7 = 4757 10 YR YLD – .08 = 1.82% OIL – .95 = 45.36 GOLD – 8.00 = 1295.10 SILV – .02 = 18.40 For the week, the Dow rose 0.9 percent, the S&P gained 1.6 percent and the Nasdaq added 2.7 percent. The ECB announced plans yesterday to expand asset purchases by €60B per month until at least September 2016. ECB President Mario Draghi says the new stimulus plan “should strengthen demand, increase capacity utilization and support money and credit growth.” Well, it will make somebody rich, but the benefits to the broader Euro economy are still very much up in the air. Bonds in the region rallied, with the yields on 10-year notes of Germany, Italy, Spain and France falling to all-time lows. Stocks in the region on track for their best week since 2011 but the euro currency has dropped below $1.12. Greece’s leftist Syriza party leads the opinion polls heading into an election on Sunday. The ECB’s debt-purchasing program will not include Greece, at least not until July, and only then if a continuing review of the country’s bailout program is successfully completed. The basic bond buying plan wasn’t kind to Greece, even with the exclusion built in. The way, the ECB put together their QE scheme, rather than purchase government bonds from …

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Financial Review

So Disappointing

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-20-2015_2_.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 3= 17,515 SPX + 3 = 2022 NAS + 20 = 4654 10 YR YLD un = 1.81% OIL – 2.30 = 46.39 GOLD + 13.90 = 1295.20 SILV + .19 = 18.08 Wall Street loves free money; they love free money from the Federal Reserve and for the past 5 years Wall Street has rallied on bailouts, QE, and ZIRP. The bailouts are over and the government promises they will never give away your money to the big banks again; QE, or quantitative easing is also finished and the Fed says they are out of the bond buying business for now; and ZIRP, or Zero Interest Rate Policy will patiently be replaced by slightly higher interest rates. Remember, Wall Street loves free money, so you might expect Wall Street might throw a tantrum at the prospect of no more QE and higher interest rates; we’ve seen taper tantrums in the not-so-distant past; and that might be what we’ve been experiencing to start the New Year. But the Federal Reserve is not the only central bank with a stimulus scheme. The Bank of Japan has its own QE program called Abenomics. And the European Central Bank is finally expected to launch its own QE program on Thursday. ECB President Mario Draghi has been saying he would do “whatever it takes” for the past 2 years. Now, the markets …

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Financial Review

Columbo Fed

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-01-07-2015.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 212 = 17,584 SPX + 23 = 2025 NAS + 57 = 4650 10 YR YLD – .01 = 1.95% OIL + .59 = 48.52 GOLD – 8.20 = 1212.10 SILV – .02 = 16.63 After the holidays we are finally starting to get back to economic data. Let’s start with the ADP payroll report, which shows 241,000 net new private sector jobs for December. Breaking down that number, private-sector service providers added 194,000 jobs, while goods producers added 46,000 jobs. By company size, small businesses added 106,000 private-sector jobs, large businesses added 54,000 and medium businesses added 70,000. The Labor Department reports on jobs Friday morning and we tend to look to the ADP report as a precursor to the government’s monthly report, but it isn’t a real accurate predictor. Last month the government reported 321,000 new jobs and ADP initially showed 208,000 for November. Still, we are probably looking for around 220,000 to 240,000 new jobs on Friday and today’s report was in line with that estimate. Meanwhile, Gallup has its own Job Creation Index which ended 2014 at plus 27 in December, eight points higher than where it started in January. The index has remained between plus 27 and plus 28 since May; essentially it has remained at the same level for the past eight months, suggesting the job market plateaued in the latter half …

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Financial Review

Game On

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-12-04-2014.mp3Podcast: Play in new window | Download (Duration: 13:15 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW – 12 = 17,900 SPX – 2 = 2071 NAS – 5 = 4769 10 YR YLD – .03 = 2.26% OIL – .61 = 66.77 GOLD – 3.10 = 1207.50 SILV + .06 = 16.59 Seven of the 10 main industries in the S&P 500 declined. Energy companies slumped 0.8%, following three days of gains. Chevron slid 1.3%, the most in the Dow, and Exxon Mobil declined 0.6%. Crude fell 18% last month and moves of that magnitude cannot be attributed to normal markets following supply and demand. There is manipulation in the oil market, and the question is really whether it will end well. Initial jobless claims fell 17,000 in the week ended Nov. 29 to 294,000. In the prior week, new filings hit 314,000, the first reading above 300,000 since early September. Tomorrow is the monthly jobs report and the guestimates are calling for 230,000 new jobs added and the unemployment rate steady at 5.8%. The November jobs reports are subject to some revisions, so don’t be surprised if that guesstimate is wildly off base. When the jobs report surprises to the upside, the S&P trades up two-thirds of the time, with growth sectors like Industrials outperforming. When jobs miss, gold does well. We’ll dig into the report tomorrow, but some of the important bits of data we will track includes where wages are going. There …

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Financial Review

Test Results Are In

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-24-2014.mp3Podcast: Play in new window | Download (Duration: 13:16 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 7 = 17,817 SPX + 5 = 2069 NAS + 41 = 4754 10 YR YLD – .01 = 2.31% OIL – .81 = 75.70 GOLD – 3.80 = 1199.30 SILV + .02 = 16.57 The S&P 500 has gained 11% since bottoming out in a slump that stretched from mid-September to mid-October. The rally has been driven by a belief that central bank actions in Europe, China and Japan will help invigorate global economic growth. On Friday, China’s central bank lowered a key interest rate and European Central Bank President Mario Draghi said he was willing to step up the bank’s efforts to stimulate the Eurozone, which has been struggling. Speaking of European investors that sell assets to the ECB moving into other, more risky, assets that would help accelerate the euro area’s growth, Draghi said that higher prices for European assets might encourage some foreign holders to switch away from the euro, with “investors rebalancing portfolios away from euro-denominated assets towards other jurisdictions and currencies providing higher yields.” Just to make sure that listeners got the message, he added there was evidence that the asset-purchase programs of the U.S. Federal Reserve and the Bank of Japan “led to a significant depreciation of their respective exchange rates, even in a situation in which long-term yields were already very low, as in Japan.” You have been warned; the …

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Financial Review

Fans of Gridlock

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1-11-21-2014.mp3Podcast: Play in new window | Download (Duration: 13:17 — 6.1MB)Subscribe: iTunes | Android | RSSFinancial Review by Sinclair Noe DOW + 91 = 17,810 SPX + 10 = 2063 NAS + 11 = 4712 10 YR YLD – .02 = 2.32% OIL + .77 = 76.62 GOLD + 5.80 = 1201.30 SILV + .15 = 16.50 Record highs for the Dow and the S&P. China has cut interest rates for the first time in more than 2 years. The first thought is that China is trying to stimulate growth for a slowing economy. However, in making the announcement, the People’s Bank of China tried to emphasize that the economy is growing within a reasonable range, and the rate cut was not about spurring growth. Instead, they emphasized the need to reduce corporate financing costs to help struggling companies. So, you might think that lower rates would only encourage more borrowing in a country that already has too much debt. What the Chinese central bank appears to be doing is making it feasible to refinance the existing debt at lower rates, which would allow Chinese companies to lessen their debt burdens. So, in this way, lower rates is a way to deleverage. And this is not the first attempt at reducing borrowing costs. Since September the People’s Bank of China has provided more than $130 billion in medium term loans to banks on the condition they lower borrowing rates for small businesses; trying to channel to certain industries, including small …

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Financial Review

Be Careful Out There

http://media.blubrry.com/eatthebankers/p/content.blubrry.com/eatthebankers/SINCLAIR_NOE-SEG_1_2-08-22-2014.mp3Podcast: Play in new window | Download (Duration: 20:28 — 9.4MB)Subscribe: iTunes | Android | RSS08222014 LISTEN HERE DOW – 38 = 17,001 SPX – 3 = 1988 NAS + 6 = 4538 10 YR YLD un = 2.40% OIL – .46 = 93.50 GOLD + 4.30 = 1281.60 SILV un = 19.51 All three major indices posted gains for the week, with the Dow up 2%, the S&P up 1.7% and the Nasdaq up 1.6%. It was the strongest week of gains for both the Dow and the S&P since April, and the third straight week of gains for all three indices. There is a lot to cover before we can wrap up the week. First we go to Jackson Hole Wyoming, where the Fed has been having a friendly get together of economists. Janet Yellen kicked off the event with a speech this morning. She said what you might expect: “There is no simple recipe for appropriate policy,” and she called for a “pragmatic” approach that gives officials room to evaluate data as it arrives without committing to a preset policy path. And she backed up her comments with a new tool, the Labor Market Conditions Index, which measures 19 labor market indicators, and it isn’t new data, just combining it all together, but it showed she is monitoring the data. Yellen referenced the possibility that labor markets may be a bit tighter than they seem and that the Fed may consider having to raise interest rates sooner …

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